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Q. |
The Fisher effect . |
A. | States that nominal interest rates are equal to the real interest rates plus the expected inflation rate |
B. | States that nominal interest rates are equal to real interest rates minus the expected inflation rate |
C. | Predicts that as the expected inflation rate rises, so do nominal interest rates |
D. | Predicts that as the expected inflation rate rises, real interest rates fall |
Answer» C. Predicts that as the expected inflation rate rises, so do nominal interest rates |
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