Which country has the higher inflation rate

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Reference no: EM131242304

In a long run equilibrium, Country A has an interest rate of 10%, whereas Country B has an interest rate of 7%. Real output in each country is growing at 2% per year. The money growth rate in Country B is 6%. Please provide explanations for each point below (show you calculations).

Which country has the higher inflation rate?

Which country has a higher real interest rate?

Which is the inflation rate in Country B?

What is the inflation rate and money growth rate in Country A?

Reference no: EM131242304

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