According to the Fisher Effect, If a Lender and a Borrower

question 29

Multiple Choice

According to the Fisher effect, if a lender and a borrower would agree on an interest rate of 8 percent when no inflation is expected, they should set a rate of _______ when an inflation rate of 3 percent is expected.

• A) 2 percent
• B) 5 percent
• C) 8 percent
• D) 11 percent

---

Definitions:

PPACA

Stands for Patient Protection and Affordable Care Act, a comprehensive health care reform law enacted in March 2010 intended to improve access to health insurance for US residents.

Health Insurance

is a type of insurance coverage that pays for an individual's medical and surgical expenses or reimburses losses from illness or injury.

Government Insurance

Protection or coverage provided by a governmental entity as opposed to private insurance companies, often for health, employment, or social welfare purposes.

Health Insurance Coverage

A contract between an individual or employer and an insurance company to cover part or all of the healthcare expenses incurred by the insured.