The Fisher equation implies ________.
A) the nominal interest rate equals the real rate of inflation plus expected inflation
B) the real interest rate equals expected inflation
C) expected inflation equals current inflation
D) the growth rate of inflation equals the real minus the nominal rates of interest
E) none of the above

Question

Quizplus · Accepted Answer

The Fisher equation states that the nominal interest rate is the sum of the real interest rate and expected inflation, not any of the options provided.

The Fisher Equation Implies ________