Suppose on July 1^st, the nominal interest rate is 10%, and the real interest rate is 2%. Considering the Fisher Effect, what can we say about the expected inflation rate, what can we say about the expected inflation rate?

a. Because of the Law of One Price, the two values will converge to parity by the end of the year.

b. We expect the inflation rate to be around 4%

c. We expect the inflation rate to be around 8%

d. We cannot say much about the inflation rate, but a stimulus check will help control the inflation.

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