1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
kari74 [83]
1 year ago
7

The Fisher effect indicates that an increase in the expected inflation rate will cause the real rate of interest to:

Business
1 answer:
mariarad [96]1 year ago
6 0

The Fisher effect indicates that an increase in the expected inflation rate will cause the real rate of interest to: increase by the same amount.

<h3>What Is the Fisher Effect?</h3>

The Fisher Effect refers to the relationship between nominal interest rates, real interest rates, and inflation expectations. The relationship was first described by American economist Irving Fisher in 1930.

The relationship is described by the following equation:

                                   (1+i) = (1+r) * (1+π)

Where:

i = Nominal Interest Rate.

r = Real Interest Rate.

π = Expected Inflation Rate.

The Fisher Effect is an important relationship in macroeconomics. It describes the causal relationship between the nominal interest rate and inflation. It states that an increase in nominal rates leads to a decrease in inflation. The key assumption is that the real interest rate remains constant or changes by a small amount.

Hence , we can conclude that the correct option is A.

Your question is incomplete, but most probably your full question was:

The Fisher effect indicates that an increase in the expected inflation rate will cause the nominal rate of interest to:

A. increase by the same amount.

B. decrease by the same amount.

C. become unpredictable.

D. remain relatively constant.

Learn more about Fisher Effect on:

brainly.com/question/15040842

#SPJ4

You might be interested in
In which part of a professional email should you be brief but highly descriptive?
ollegr [7]
I believe it's the subject line. Hope this helps. :)
6 0
3 years ago
the gdp of a country hasn’t improved in the past three years. the central bank decided to take a measure that will increase the
Brut [27]
Generally, the Central Bank will reduce the interest rate to allow banks to lend money at a lower rate, thus infusing the macro-economy with funding on medium to large ticket items.
7 0
2 years ago
Read 2 more answers
Technician A says that magnetism can cause electric current to flow in a conductor. Technician B says that magnetic lines of flu
VashaNatasha [74]
A I think is the answer
6 0
2 years ago
The budgeted variable selling and administrative expense is calculated by multiplying the budgeted unit sales by the variable se
postnew [5]

Answer: True

Explanation:

Variable selling and administrative expenses increase with the number of sales so in order to get them, one needs to multiply the number of sales by the variable and administrative expenses.

This also goes for the budgeted variable selling expenses. To find out these costs, multiply the expected variable and admin expenses by the budgeted number of sales. The amount you get will show the amount of variable expenses to budget based on the sales you budgeted.

3 0
2 years ago
​ object responsibility is important because it helps to decide what methods are assigned to what classes.
stiv31 [10]
It's not so much an important of trust, but preferably one of managing complexity. Software Engineering Stack shifted a question and answer site for professionals. academics, and students working within the systems development life around. Private adaptable help averts people from a hinge on certain parts of your code.
8 0
3 years ago
Other questions:
  • The division of labor means that:_______.a) labor markets are geographically segmented. b) unskilled workers outnumber skilled w
    13·1 answer
  • A macroeconomist - as opposed to a microeconomist - would study a. the effects of raising the gasoline tax on transit ridership.
    9·1 answer
  • Lee qualified as head of a household for 2019 tax purposes. Lee’s 2019 taxable income was $100,000, exclusive of capital gains
    8·1 answer
  • What is the main purpose of monetary policies?
    7·2 answers
  • A firm in monopolistic competition tends to have more control over price when it is Group of answer choices more successful at d
    5·1 answer
  • Suppose that a business incurred implicit costs of $500,000 and explicit costs of $5 million in a specific year. If the firm sol
    6·1 answer
  • Martin Company manufactures a powerful cleaning solvent. The main ingredient in the solvent is a raw material called Echol. Info
    10·1 answer
  • Other things held constant, following an increase in the effective tax rate on capital, the real interest rate _____ and desired
    5·1 answer
  • Explain what the time period assumption means.
    14·1 answer
  • Recently, u. S. Dairies, struggling to increase milk sales, tried to change the way adults thought about milk. The dairies wante
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!