Suppose the money supply grew at an average annual rate of 8%, velocity was constant, the nominal interest rate averaged 9%, and output grew at an average annual rate of 3%. According to the Quantity Theory,
a. inflation averaged 8% per year and the real rate of return was 9%.
b. inflation averaged 11% per year and the real rate of return was 17%.
c. inflation averaged 5% per year and the real rate of return was 4%.
d. inflation averaged 1% per year and the real rate of return was 6%.