What is meant by the Fisher effect?
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Question b
What is the difference between the Fisher Equation and the Fisher Effect? (2 Points)
Question c
If money supply growth causes inflation, how will this impact upon the Fisher Effect, quantity of bonds and the interest rates? (6 Points)
Based on your research, what factors influence the prediction of future inflation rates? Contrast the relationship between the Fisher effect and interest rates, taking into account the rationale behind why the Fisher effect uses either primarily short- or long-term investments.