Suppose you borrow $500 and agree to pay this $500 plus $75 of interest at the end of a year. The interest rate is:

Which of the following summarizes the Fisher Effect?

A. Nominal interest rates will rise with unexpected inflation. B. Nominal interest rates will rise with expected inflation. C. Real interest rates will rise with unexpected inflation. D. Real interest rates will rise with expected inflation.

Assume there is a simultaneous decrease in the incomes of people in the market for new homes and a decrease in the wages paid to carpenters, plumbers, and electricians

All else constant, we can predict, with certainty, that in the market for new homes the equilibrium: A) quantity of new homes will decrease. B) quantity of new homes will increase. C) price of new homes will decrease. D) price of new homes will increase.