Question
*You expect inflation over the next year to be 4.2%. Actual inflation over the last year was -0.7%, and the current nominal interest rate is
*You expect inflation over the next year to be 4.2%. Actual inflation over the last year was -0.7%, and the current nominal interest rate is 5.8%. What is your expected real rate of interest (in %)? Round to 0.01%. E.g., if your answer is 3.145%, record it as 3.15.
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*The expected real rate of interest is 0.8%, actual inflation over the last year was -1.7%, and the nominal interest rate is currently 7.1%. According to the Fisher equation, what is the expected inflation (in %) over the next year, dPe? Round to 0.01%. E.g., if your answer is 3.145%, record it as 3.15.
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*The expected real rate of interest is 5.4%, actual inflation over the last year was 3.3%, and expected inflation over the next year is -1.2%. What is the current level of nominal interest rates (in %) predicted by the Fisher equation? Round to 0.01%. E.g., if your answer is 3.145%, record it as 3.15.
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