Question

Fisher's Law states that

• A. the nominal rate of interest is approximately equal to anticipated inflation

• B. the nomimal rate of interest is approximately equal to the real rate of interest plus anticipated inflation

• C. the nominal rate of interest is approximately equal to the real rate of interest

• D. the real rate of interest is approximately equal to the nominal rate of interest plus anticipated inflation

Answer 1

Answer

Option B

B. the nominal rate of interest is approximately equal to the real rate of interest plus anticipated inflation

Nominal interest rate=real interest rate + anticipated inflation