Consider Two Countries: Country a and Country B

Multiple Choice

Consider two countries: Country A and Country B.If the gap between the growth rate of money supply and growth rate of real GDP is larger in Country A than in Country B,then,according to the quantity theory of money,________.

A) the inflation rate will be higher in Country A
B) the inflation rate will be lower in Country A
C) real interest rates will be higher in Country A
D) nominal interest rates will be lower in Country A