In its approximate form the Fisher effect may be written as ________.Where: i = the nominal rate of interest,r = the real rate of return and π = the expected rate of inflation.

Question

Quizplus · Accepted Answer

The Fisher effect states that the nominal interest rate (i) is equal to the sum of the real interest rate (r) and the expected inflation rate (π). Mathematically, it can be expressed as i = r + π. Therefore, the correct option is C.

In Its Approximate Form the Fisher Effect May Be Written