Which of the Statements Below Is FALSE

question 71

Multiple Choice

Which of the statements below is FALSE?

• A)The Fisher Effect is the relationship between three items: the nominal rate,the real rate,and inflation.
• B)In the Fisher Effect,r* is the real interest rate.
• C)The product of the real rate and the inflation rate can be thought of as the additional compensation needed for the fact that the interest being earned during the year is not subject to inflation.
• D)In the Fisher Effect,r is the nominal interest rate.

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