Final answer:
The Fisher equation tells us to add the real interest rate and the inflation rate together to determine the nominal interest rate.
Step-by-step explanation:
The Fisher equation tells us to add the real interest rate and the inflation rate together to determine the nominal interest rate. Remember that the real interest rate is calculated by subtracting the rate of inflation from the nominal interest rate. For example, if the nominal interest rate is 7% and the rate of inflation is 3%, then the real interest rate would be 4% (7% - 3% = 4%). So, to determine the nominal interest rate, you would add the real interest rate and the inflation rate together.
Keep in mind that the Fisher equation is a theoretical concept used in economics to analyze the relationship between interest rates and inflation rates.