The Fisher Effect

question 126

Multiple Choice

The Fisher effect

• A)says the government can generate revenue by printing money.
• B)says there is a one for one adjustment of the nominal interest rate to the inflation rate.
• C)explains how higher money supply growth leads to higher inflation.
• D)explains how prices adjust to obtain equilibrium in the money market.

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Definitions:

Truth in Lending Act

A United States federal law designed to promote the informed use of consumer credit, requiring disclosures about its terms and cost.

Closed-end Credit

A type of loan where a borrower receives a fixed amount of money to be repaid with interest by a specified date or in installments.