Consider two countries, CU and OU. In CU, new technology for
making payments, such as credit cards, have been enthusiastically
adopted by the population , thereby reducing over time the
proportion of income that is held as real money balances. Over this
period, no such changes occurred in OU. If the rate of money growth
and the growth rate of real GDP were the same in CU and OU over
this period, then how would the rate of inflation differ between
the two countries? Carefully explain your answer. Use the
Quantity Theory of Money to answer this problem and show your work
(i.e., use some equations).