When the Fisher Effect Holds,a One-Percentage-Point Increase in the Long-Run

Multiple Choice

When the Fisher Effect holds,a one-percentage-point increase in the long-run money growth rate,because it ________ expected inflation,causes ________ in the nominal interest rate in the long run.

A) equally lowers,a one-percentage-point decrease
B) does not change,a one-percentage point decrease
C) does not change,no change
D) equally raises,no change
E) equally raises,a one-percentage-point increase