According to the Fisher effect, the nominal interest rate moves one-for-one with changes in the:
A) inflation rate.
B) expected inflation rate.
C) ex ante real interest rate.
D) ex post real interest rate.

Question

Quizplus · Accepted Answer

The Fisher effect posits that the nominal interest rate adjusts one-for-one with changes in the expected inflation rate, keeping the real interest rate constant.

According to the Fisher Effect, the Nominal Interest Rate Moves