Describe the expectations hypothesis theory


Questions:

1. Explain changes in expected inflation or the "Fisher Effect" which is the proposition by Irving Fisher that the real interest rate is  independent of monetary measures, specifically the nominal interest rate and the expected inflation rate.

2. Describe the "Expectations Hypothesis" theory as it attempts to explain the term structure of interest rates.

3. Describe the "Liquidity Premium Preferred Habitat" theory as it attempts to explain the term structure of interest rates.

4. Describe the "Segmented Markets" theory as it attempts to explain the term structure of interest rates.

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Microeconomics: Describe the expectations hypothesis theory
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