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Which of the following statements is FALSE regarding the Fisher Effect? i. Ceteris paribus, the higher the inflation, the higher the real interest rate. iii.

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Which of the following statements is FALSE regarding the Fisher Effect? i. Ceteris paribus, the higher the inflation, the higher the real interest rate. iii. If prices rise by 7% and your salary increases by 9%, you will experience a gain of purchasing power. iv. The Fisher Effect illustrates the inverse relationship between inflation and nominal interest rates. A. i and iii only B. iv only C. i,ii, and iv D. i and ii only

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