An Increase in the Anticipated (Or Expected) Rate of Inflation

Multiple Choice

An increase in the anticipated (or expected) rate of inflation will cause the nominal interest rate to

A) increase by less than the change in the anticipated inflation rate.
B) increase by the same amount as the change in the anticipated inflation rate.
C) decrease by more than the change in the anticipated inflation rate.
D) decrease by the same amount as the change in the anticipated inflation rate.
E) stay the same.