Which of the Following Is an Example of the Fisher

question 67

Multiple Choice

Which of the following is an example of the Fisher effect?

• A) Expansionary monetary policy reduces inflation by 3%, and interest rates rise 3%.
• B) Inflationary expectations rise from 2% to 6%, which causes interest rates to rise from 5% to 9%.
• C) Contractionary monetary policy reduces inflation by 2%, and interest rates rise by 3%.
• D) Inflationary expectations fall from 4% to 2%, which causes interest rates to rise from 6% to 8%.