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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

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When Men's Wearhouse fired a salesperson who wasn't sharing walk-in customer traffic, and total clothing sales volume among all salespeople increased significantly, the company reduced destructive internal competition.

<h3>What is a destructive competition?</h3>
  • Multiple producers being driven out of the market by competition.
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<h3>What do you mean by internal competition?</h3>
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<h3>Is competition is constructive or destructive?</h3>
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3 0
1 year ago
Why do some workers lose their job when the minimum wage is​ increased?
Julli [10]
The company can't afford to pay their employees. If you have 100$ you can have ten people working for 10$ an hour and pay everyone for one hour. You can't have 10 people getting paid 20$ because the company would lose money. So if they are paid 20$ per hour, the company can only afford to hire 5 employees. 
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Which of the following is the most appropriate topic to address in a college application essay?
Aleksandr [31]

Answer:

C

Explanation:

because I feel that many individuals would select the most basic option, such as A or B.

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Using college students as the market segment, describe the most relevant reference group(s) and indicate the probable degree of
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Answer and Explanation:

A. Toothpaste brand: Toothpaste is a commonly used, inexpensive, and very popular product. These decisions are governed mainly by the reference group such as family , friends or primary group with whom a student has regular face to face experiences. Hence the purchase decision is affected by a low degree of comparison community.

B. Buying a hybrid car: A hybrid car is sometimes described as expensive and luxury products. It's moreover a non-necessity commodity for a college student. These decisions are therefore usually affected by secondary community. And a high degree of control in the comparison community will only inspire a student to buy a car.

C. Buying cereal for breakfast: This is a simple requirement of a lifetime. Therefore, even without consulting any reference group a student can buy such product. Often such transactions are rules by family group control. So it needs a low degree of control.

D. Becoming a vegetarian: It takes a high degree of influence and motivation to become a vegetarian.

Thus the aspirational group influences a student. So they opt for vegetarianism to become part of such a community. Such decision taking involves a high degree of control.

E. Option of a computer tablet like the iPod: these products are a luxury commodity sold at regular prices. Typically refer to their families , friends, magazines before making a purchase student to get an idea about the output and price of these products. These goods are the weak product with a strong brand and a strong purchase is controlled by a strong reference community impact.

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