Which of the following summarizes the Fisher Effect?
A. Nominal interest rates will rise with unexpected inflation.
B. Nominal interest rates will rise with expected inflation.
C. Real interest rates will rise with unexpected inflation.
D. Real interest rates will rise with expected inflation.
Ans: B. Nominal interest rates will rise with expected inflation.
You might also like to view...
Each of the following took place in the latter half of the 1990s except
A. a declining federal budget deficit. B. a declining unemployment rate. C. the spread of computerization. D. a rising rate of inflation.
A method of detecting discrimination that involves researchers faking identities for people who are essentially alike but but differ in race, gender, or some other characteristic is called
A) the audit method. B) regression analysis. C) statistical discrimination. D) taste-based discrimination.
If a union is able to decrease the supply of workers in a competitive labor market but the union cannot affect the demand for its members' labor, then
A) wages and the quantity of labor hired will both increase. B) wages will increase but the quantity of labor hired will decrease. C) wages will decrease but the quantity of labor hired will increase. D) wages and the quantity of labor hired will both decrease.
To the extent that the CPI does not accurately measure the true price level,
a. the BLS will change the underlying market basket of goods b. it is useless c. it exaggerates the true cost of living d. it results in underindexation of social security payments e. it underestimates the true cost of living