Question: Would really appreciate help with this question! The one-year nominal rate of interest is 13.8% and the expected annual inflation rate is 6.9%. a. What

Would really appreciate help with this question!

The one-year nominal rate of interest is 13.8% and the expected annual inflation rate is 6.9%.

a.What is the expected real interest rate?

b-1. If the expected rate of inflation suddenly rises to 8.9%, what does Fishers theory say about how the real interest rate will change?

multiple choice

Real rate does not change
Real rate decreases
Real rate increases

b-2. If the expected rate of inflation suddenly rises to 8.9%, what will be the new nominal rate? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

Much Appreciated!

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