Suppose that velocity and output are constant and that the quantity theory and Fisher effect are both correct. If the nominal interest rate is 8 percent and inflation is 3 percent, what is the money supply growth rate or the real interest rate?
A)The money supply growth rate is 3 percent.
B)The real interest rate is 11 percent.
C)The real interest rate is 8 percent.
D)The money supply growth rate is 11 percent.

Question

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The Answer of Suppose that velocity and output are constant and that the quantity theory and Fisher effect are both correct. If the nominal interest rate is 8 percent and inflation is 3 percent, what is the money supply growth rate or the real interest rate?
A)The money supply growth rate is 3 percent.
B)The real interest rate is 11 percent.
C)The real interest rate is 8 percent.
D)The money supply growth rate is 11 percent.

Suppose That Velocity and Output Are Constant and That the Quantity