According to the Fisher Hypothesis, If the Real Interest Rate

question 1

Multiple Choice

According to the Fisher hypothesis, if the real interest rate is 5 percent and the inflation rate rises from 2 percent to 4 percent, then the nominal interest rate will _____percentage points and the real interest rate will change by ______percentage points.

• A)rise by 0; ?2
• B)fall by 2; ?2
• C)rise by 2; 0
• D)fall by 1; 1

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