Multiple Choice
According to the Fisher effect, a 5% decrease in the expected inflation rate results in:
A) a 5% decrease in the nominal interest rate.
B) a more than 5% increase in the nominal interest rate.
C) a 5% decrease in the real interest rate.
D) a more than 5% increase in the real interest rate.
Correct Answer:
Verified
Correct Answer:
Verified
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