Inflation has increased to new highs in recent years. How does expectation of higher inflation in the coming years affect interest rates? O A. Demand for bonds increases while supply of bonds declines...

Extracted text: Inflation has increased to new highs in recent years. How does expectation of higher inflation in the coming years affect interest rates? O A. Demand for bonds increases while supply of bonds declines leading to a higher nominal interest rate. O B. Demand for bonds declines while supply of bonds rises resulting in higher nominal interest rates in the market. O C. Demand for bonds rises in the expectation of higher nominal interest rates leading to a rise in the interest rate. O D. Higher expectation of inflation will lower demand for money causing interest rates to decline in the future.