The link between real and nominal interest rates is called:
A)the MP curve.
B)the Phillips curve.
C)Okun's law.
D)the Fisher equation.
E)Jones's equality.

Question

Quizplus · Accepted Answer

The Fisher equation expresses the relationship between the real and nominal interest rates, stating that the nominal interest rate is equal to the real interest rate plus the expected rate of inflation. It is formulated as i = r + π, where i is the nominal interest rate, r is the real interest rate, and π is the rate of inflation. Therefore, D is the correct answer. The other options are not relevant to the relationship between real and nominal interest rates.

The Link Between Real and Nominal Interest Rates Is Called