Currently, Econia's Nominal Interest Rate Is 5

question 60

Multiple Choice

Currently, Econia's nominal interest rate is 5%. Its inflation rate is forecast to rise from 2% to 3% next year. According to the Fisher effect, if Econia's inflation rate rises as predicted, then its nominal interest rate will be _____, and its real interest rate will be:

• A) 6%; 3%.
• B) 6%; 2%.
• C) 4%; 1%.
• D) 4%; 7%.

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Definitions:

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A moral responsibility or duty that guides individuals' actions and decisions, often determined by societal norms or professional guidelines.

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