Multiple Choice
According to the Fisher hypothesis, if the real interest rate is 2 percent and the inflation rate falls from 3 percent to 1 percent, then the nominal interest rate will_____percentage points and the real interest rate will decline by______ percentage points.
A) decline by 0; 2
B) increase by 2; 2
C) increase by 0; 0
D) decline by 2; 0 percentage points and the real interest rate will decline by
Correct Answer:
Verified
Correct Answer:
Verified
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