The classical dichotomy and the neutrality of money
The classical dichotomy is the separation of real and nominal variables. The following questions test your understanding of this distinction.
Rina spends all of her money on magazines and beignets. In 2013, she earned $18.00 per hour, the price of a magazine was $9.00, and the price of a beignet was $2.00. Which of the following give the nominal value of a variable?
A. The price of a beignet is $3.00 in 2011.
B. Maria's wage is $27.00 per hour in 2011.
C. The price of a beignet is 0.33 paperback novels in 2011.
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The classical dichotomy and the neutrality of money
The classical dichotomy is the separation of re...
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