The claim that increases in the growth rate of the money supply increase nominal interest rates but not real interest rates is known as the
A)Friedman Effect.
B)Hume Effect.
C)Fisher Effect.
D)inflation tax.

Question

Quizplus · Accepted Answer

The Fisher Effect states that the real interest rate is unaffected by changes in the money supply, which instead influence the nominal interest rate through inflation expectations.

The Claim That Increases in the Growth Rate of the Money