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Alex_Xolod [135]
3 years ago
6

According to the Fisher Effect, the expected rate of inflation does not influence the:________.

Business
1 answer:
Alekssandra [29.7K]3 years ago
6 0

Answer:

ex ante real interest rate.

Explanation:

According to Fisher effect the expected inflation rate will affect indices like nominal interest rate, current prices of goods, and the demand for money.

However it does not affect the ex ante real interest rate.

The Fisher effect shows how real interest rate is related to nominal interest rate.

Real interest rate = Nominal interest rate - Expected inflation rate

Ex ante real interest rate is the anticipated real interest rate in the future.

This is not considered in the Fisher effect

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