The Fisher effect summarises the effects of:
A) inflation on the real interest rate in the medium run.
B) inflation on the real interest rate in the short run.
C) inflation on the nominal interest rate in the short run.
D) inflation on the natural real interest rate in the short run.
E) inflation on the nominal interest rate in the medium run.

Question

Quizplus · Accepted Answer

The Fisher effect describes the relationship between inflation and nominal interest rates, indicating that nominal interest rates adjust to expected inflation in the medium to long run.

The Fisher Effect Summarises the Effects Of