Under the assumptions of the Fisher effect and monetary neutrality, if the money supply growth rate rises, then both the nominal and the real interest rate rise. neither the nominal nor the real interest rate rise. the nominal interest rate rises, but the real interest rate does not. O the real interest rate rises, but the nominal interest rate does not.
Under the assumptions of the Fisher effect and monetary neutrality, if the money supply growth rate rises, then both the nominal and the real interest rate rise. neither the nominal nor the real interest rate rise. the nominal interest rate rises, but the real interest rate does not. O the real interest rate rises, but the nominal interest rate does not.
Chapter1: Making Economics Decisions
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Transcribed Image Text:Under the assumptions of the Fisher effect and monetary neutrality, if the
money supply growth rate rises, then
both the nominal and the real interest rate rise.
neither the nominal nor the real interest rate rise.
the nominal interest rate rises, but the real interest rate does not.
the real interest rate rises, but the nominal interest rate does not.
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