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The two-year interest rate is 12.2% and the expected annual inflation rate is 6.1%. a.What is the expected real interest rate? (Do not round intermediate

The two-year interest rate is 12.2% and the expected annual inflation rate is 6.1%. 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 8.1%, what does Fishers theory say about how the real interest rate will change? Real rate does not change Real rate increases Real rate decreases b-3. If the expected rate of inflation suddenly rises to 8.1%, 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 %

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