Problem 3-29 Real interest rates The two-year interest rate is 12.8% and the expected annual inflation rate is 6.4%. a. What is the expected real interest rate? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Expected real interest rate b-1. If the expected rate of inflation suddenly rises to 8.4%, what does Fisher's theory say about how the real interest rate will change? Real rate decreases Real rate does not change O Real rate increases b-2. If the expected rate of inflation suddenly rises to 8.4%, what will be the new nominal rate? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Nominal rate Problem 3-29 Real interest rates The two-year interest rate is 12.8% and the expected annual inflation rate is 6.4%. a. What is the expected real interest rate? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Expected real interest rate b-1. If the expected rate of inflation suddenly rises to 8.4%, what does Fisher's theory say about how the real interest rate will change? Real rate decreases Real rate does not change O Real rate increases b-2. If the expected rate of inflation suddenly rises to 8.4%, what will be the new nominal rate? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Nominal rate