The Fisher formula is expressed as ________ where R is the nominal rate,r is the real rate,and h is the inflation rate.
A)r = Rh
B)R = rh
C)1 + h = (1 + r)/(1 + R)
D)1 + R = (1 + r)/(1 + h)
E)1 + R = (1 + r)(1 + h)

Question

Quizplus · Accepted Answer

The Fisher formula, which relates the nominal interest rate (R), the real interest rate (r), and the inflation rate (h), is correctly expressed as 1 + R = (1 + r)(1 + h). This formula shows how the nominal rate is the product of the real rate and the inflation rate, adjusted for the compounding effect.

The Fisher Formula Is Expressed as ________ Where R Is