From the Fisher equation we see that the nominal interest rate and expected inflation have:
A) an inverse relationship.
B) a relationship which is direct but less than one-to-one.
C) a relationship which is direct and one-to-one.
D) no relationship.

Question

Quizplus · Accepted Answer

The Fisher equation posits that the nominal interest rate is equal to the real interest rate plus the expected inflation rate, implying a direct and one-to-one relationship between nominal interest rates and expected inflation.

From the Fisher Equation We See That the Nominal Interest