3. 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. Yesmina divides all of her income between spending on puzzle books and lattes. In 2015, she earned an hourly wage of $28.00, the price of a puzzle book was $7.00, and the price of a latte was $4.00. Which of the following give the real value of a variable? Check all that apply. The price of a puzzle book is 1.75 lattes in 2015. The price of a puzzle book is $7.00 in 2015. Yesmina's wage is $28.00 per hour in 2015. Which of the following give the nominal value of a variable? Check all that apply. The price of a latte is $4.00 in 2015. O The price of a latte is 0.57 puzzle books in 2015. Yesmina's wage is 4 puzzle books per hour in 2015. Suppose that the Fed sharply increases the money supply between 2015 and 2020. In 2020, Yesmina's wage has risen to $56.00 per hour. The price of a puzzle book is $14.00 and the price of a latte is $8.00. In 2020 the relative price of a puzzle book is

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3. 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.
Yesmina divides all of her income between spending on puzzle books and lattes. In 2015, she earned an hourly wage of $28.00, the price of a puzzle
book was $7.00, and the price of a latte was $4.00.
Which of the following give the real value of a variable? Check all that apply.
The price of a puzzle book is 1.75 lattes in 2015.
The price of a puzzle book is $7.00 in 2015.
Yesmina's wage is $28.00 per hour in 2015.
Which of the following give the nominal value of a variable? Check all that apply.
The price of a latte is $4.00 in 2015.
The price of a latte is 0.57 puzzle books in 2015.
Yesmina's wage is 4 puzzle books per hour in 2015.
Suppose that the Fed sharply increases the money supply between 2015 and 2020. In 2020, Yesmina's wage has risen to $56.00 per hour. The price
of a puzzle book is $14.00 and the price of a latte is $8.00.
In 2020, the relative price of a puzzle book is
Transcribed Image Text:3. 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. Yesmina divides all of her income between spending on puzzle books and lattes. In 2015, she earned an hourly wage of $28.00, the price of a puzzle book was $7.00, and the price of a latte was $4.00. Which of the following give the real value of a variable? Check all that apply. The price of a puzzle book is 1.75 lattes in 2015. The price of a puzzle book is $7.00 in 2015. Yesmina's wage is $28.00 per hour in 2015. Which of the following give the nominal value of a variable? Check all that apply. The price of a latte is $4.00 in 2015. The price of a latte is 0.57 puzzle books in 2015. Yesmina's wage is 4 puzzle books per hour in 2015. Suppose that the Fed sharply increases the money supply between 2015 and 2020. In 2020, Yesmina's wage has risen to $56.00 per hour. The price of a puzzle book is $14.00 and the price of a latte is $8.00. In 2020, the relative price of a puzzle book is
ITIC lice on a puzzic DOOR IS 1.75 Talles in 2013.
The price of a puzzle book is $7.00 in 2015.
Yesmina's wage is $28.00 per hour in 2015.
Which of the following give the nominal value of a variable? Check all that apply.
The price of a latte is $4.00 in 2015.
The price of a latte is 0.57 puzzle books in 2015.
Yesmina's wage is 4 puzzle books per hour in 2015.
Suppose that the Fed sharply increases the money supply between 2015 and 2020. In 2020, Yesmina's wage has risen to $56.00 per hour. The price
of a puzzle book is $14.00 and the price of a latte is $8.00.
In 2020, the relative price of a puzzle book is
Between 2015 and 2020, the nominal value of Yesmina's wage
Monetary neutrality is the proposition that a change in the money supply
variables.
and the real value of her wage
nominal variables and
real
Transcribed Image Text:ITIC lice on a puzzic DOOR IS 1.75 Talles in 2013. The price of a puzzle book is $7.00 in 2015. Yesmina's wage is $28.00 per hour in 2015. Which of the following give the nominal value of a variable? Check all that apply. The price of a latte is $4.00 in 2015. The price of a latte is 0.57 puzzle books in 2015. Yesmina's wage is 4 puzzle books per hour in 2015. Suppose that the Fed sharply increases the money supply between 2015 and 2020. In 2020, Yesmina's wage has risen to $56.00 per hour. The price of a puzzle book is $14.00 and the price of a latte is $8.00. In 2020, the relative price of a puzzle book is Between 2015 and 2020, the nominal value of Yesmina's wage Monetary neutrality is the proposition that a change in the money supply variables. and the real value of her wage nominal variables and real
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