The Fisher Equation demonstrates that in the presence of both inflation and taxes the real after- tax interest rate will always be negative.

Name: The Fisher Equation demonstrates that in the presence of both inflation and taxes the real after- tax interest rate will always be negative.
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Question

Quizplus · Accepted Answer

The Fisher Equation relates nominal interest rates, real interest rates, and inflation. It does not inherently account for taxes or guarantee that the real after-tax interest rate will always be negative.

The Fisher Equation Demonstrates That in the Presence of Both