5. The Fisher effect The Fisher effect explains the relationship between interest rates and expected inflation. Which of the following equations best exemplifies the Fisher effect? i = E(INF) IR E(INF) = i - ir E(INF) =i-i ir = i +E(INF) Suppose in a hypothetical economy, the expected inflation rate is 7% and the real interest rate is -1%. The nominal Interest rate is: -7% 1% 6% 13%