The nominal interest rate is

7%

and the expected inflation rate is

2%

. Based on the Fisher efrect, the real rate of interest is

A

)

5.0%

ia\ B)

6.8%

.\

5,1^(@1.)

\

4.9^(n)

\ Real intrest rate

=

Normel intest rate

3. The nomirtal interest rate is 7n0 and the expected inflation rate is 2%. Based on the Fisher efrect, the real rate of interest is A ) 5.0% : B) k,k \% 5,1in 4.9ni Real intrest rate = Normal intast rate