3. The classical dichotomy and the neutrality of moneyThe classical dichotomy is the separation of real and nominal variables. The following questions test your understanding of this distinction.Caroline spends all of her money on paperback novels and mandarins. In 2012, she earned $14.00 per hour, the price of a paperback novel was$7.00, and the price of a mandarin was $2.00.Which of the following give the nominal value of a variable? Check all that apply.The price of a mandarin is 0.29 paperback novels in 2012.O Caroline's wage is 2 paperback novels per hour in 2012.The price of a mandarin is $2.00 in 2012.Which of the following give the real value of a variable? Check all that apply.O The price of a paperback novel is $7.00 in 2012.O Caroline's wage is $14.00 per hour in 2012.The price of a paperback novel is 3.5 mandarins in 2012.Suppose that the Fed sharply increases the money supply between 2012 and 2017. In 2017, Caroline's wage has risen to $28.00 per hour. The pricof a paperback novel is $14.00 and the price of a mandarin is $4.00.In 2017, the relative price of a paperback novel isBetween 2012 and 2017, the nominal value of Caroline's wageMonetary neutrality is the proposition that a change in the money supplyvariables.and the real value of her wagenominal variables andGrade It NowrealSave & ContinueContinue without savir

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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. Caroline spends all of her money on paperback novels and mandarins. In 2012, she earned $14.00 per hour, the price of a paperback novel was $7.00, and the price of a mandarin was $2.00. Which of the following give the nominal value of a variable? Check all that apply. The price of a mandarin is 0.29 paperback novels in 2012. Caroline's wage is 2 paperback novels per hour in 2012. The price of a mandarin is $2.00 in 2012. Which of the following give the real value of a variable? Check all that apply. The price of a paperback novel is $7.00 in 2012. O Caroline's wage is $14.00 per hour in 2012. The price of a paperback novel is 3.5 mandarins in 2012. Suppose that the Fed sharply increases the money supply between 2012 and 2017. In 2017, Caroline's wage has risen to $28.00 per hour. The pr of a paperback novel is $14.00 and the price of a mandarin is $4.00. In 2017, the relative price of a paperback novel is

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. Caroline spends all of her money on paperback novels and mandarins. In 2012, she earned $14.00 per hour, the price of a paperback novel was $7.00, and the price of a mandarin was $2.00. Which of the following give the nominal value of a variable? Check all that apply. The price of a mandarin is 0.29 paperback novels in 2012. Caroline's wage is 2 paperback novels per hour in 2012. The price of a mandarin is $2.00 in 2012. Which of the following give the real value of a variable? Check all that apply. The price of a paperback novel is $7.00 in 2012. O Caroline's wage is $14.00 per hour in 2012. The price of a paperback novel is 3.5 mandarins in 2012. Suppose that the Fed sharply increases the money supply between 2012 and 2017. In 2017, Caroline's wage has risen to $28.00 per hour. The pr of a paperback novel is $14.00 and the price of a mandarin is $4.00. In 2017, the relative price of a paperback novel is

ENGR.ECONOMIC ANALYSIS

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Chapter1: Making Economics Decisions

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Concept explainers

IS-LM-PC Analysis

The IS (Investment Saving), LM (Liquidity Preference- Money Supply), and PC (Philips Curve) is the model that looks at the dynamics of output and inflation. It takes into account the central bank policy decision to adjust the inflation and real interest rate in the economy. It enables the economist to weather to priorities between employment and inflation rate analyzing the model. It is a practice-driven approach adopted by economists worldwide.

IS-LM Analysis

The term IS stands for Investment, Savings, and LM stands for Liquidity Preference, Money Supply. Therefore, the term IS-LM model is known as Investment Savings – Liquidity preference money Supply. This model was introduced by a Keynesian macroeconomic theory which shows the relationship between the economic goods market and loanable funds market or money market. In other words, it shows how the market for real goods interacts with the financial markets to strike a balance between the interest rate and total output in the macroeconomy. This particular model is designed in the form of a graphical representation of the Keynesian economic theory principle. The output and money are the two important factors in an economy.

Question

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.
Caroline spends all of her money on paperback novels and mandarins. In 2012, she earned $14.00 per hour, the price of a paperback novel was
$7.00, and the price of a mandarin was $2.00.
Which of the following give the nominal value of a variable? Check all that apply.
The price of a mandarin is 0.29 paperback novels in 2012.
O Caroline's wage is 2 paperback novels per hour in 2012.
The price of a mandarin is $2.00 in 2012.
Which of the following give the real value of a variable? Check all that apply.
O The price of a paperback novel is $7.00 in 2012.
O Caroline's wage is $14.00 per hour in 2012.
The price of a paperback novel is 3.5 mandarins in 2012.
Suppose that the Fed sharply increases the money supply between 2012 and 2017. In 2017, Caroline's wage has risen to $28.00 per hour. The pric
of a paperback novel is $14.00 and the price of a mandarin is $4.00.
In 2017, the relative price of a paperback novel is
Between 2012 and 2017, the nominal value of Caroline'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
Grade It Now
real
Save & Continue
Continue without savir

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Step 1: Defining Classical dichotomy

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Give typing answer with explanation and conclusion A standard "money demand" function used by macroeconomists has the form ln(m)=β0+β1ln(GDP)+β2R, Where m is the quantity of (real) money, GDP is the value of (real) gross domesticproduct, and R is the value of the nominal interest rate measured in percent per year. Supposed that β1 = 2.66 and β2 = −0.05. A) What is the expected change in m if GDP increases by 4%? The value of m is expected to_________(increase or decrease ) by approximately ________% (Round your response to the nearest integer) B) What is projected to change in m if the interest rate increases form 2% to 6% ? The value of m is expected to ________(increase/decrease) by approximately ________% (Round your response to the nearest integer)
Suppose that velocity of money is constant, the expected inflation rate is always equal to the actual inflation rate, and the expected real interest rate is 3%. Answer the following questions. Justify your answers. -When the growth rate of the money supply is 8% and the growth rate of real GDP is 2%, what is the nominal interest rate?
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. Poornima spends all of her money on magazines and donuts. In 2015, she earned $27.00 per hour, the price of a magazine was $9.00, and the price of a donut was $3.00. Which of the following give the nominal value of a variable? Check all that apply. O The price of a donut is $3.00 in 2015. O Poornima's wage is $27.00 per hour in 2015. O The price of a donut is 0.33 magazines in 2015. Which of the following give the real value of a variable? Check all that apply. O The price of a magazine is 3 donuts in 2015. O Poornima's wage is 9 donuts per hour in 2015. O The price of a magazine is $9.00 in 2015. Suppose that the Fed sharply increases the money supply between 2015 and 2020. In 2020, Poornima's wage has risen to $54.00 per hour. The price of a magazine is $18.00 and the price of a donut is…
In an economy where the central bank implements negative interest rates as a monetary policy tool, what is the most likely short-term impact on consumer savings behavior and bank profitability? A. An increase in consumer savings as people seek to safeguard their money and a rise in bank profitability due to increased lending. B. A decrease in consumer savings as the incentive to save diminishes and a decrease in bank profitability due to lower interest margins. C. No significant change in consumer savings behavior but an improvement in bank profitability due to lower borrowing costs. D. A shift in consumer investment towards riskier assets and challenges in bank profitability due to compressed interest margins. Please don't use chatgpt it is giving wrong answer and please provide valuable answer
Question 13 According to the assumptions of the quantity theory of money, if the money supply increases by 7 percent, then neither nominal GDP nor real GDP would change. nominal GDP would fall by 7 percent; real GDP would be unchanged. nominal and real GDP would increase by 7 percent. O real GDP would be unchanged; nominal GDP would increase by 7 percent.
The neutrality of money revisited a. Fill in the empty spaces after Year 1 in the chart below: b. What is the growth rate of the nominal money supply between years 1 and 2, 2 and 3, and 3 and 4? c. What is the rate of inflation between years 1 and 2, 2 and 3, and 3 and 4? d. What is the change in the real money supply between years 1 and 2, 2 and 3, and 3 and 4? e. What assumption has been made about real output growth if this data describe the medium run?
2. Suppose that in the U.S., the income velocity of money (V) is constant. Suppose, too, that every year, real GDP grows by 2.5 percent (%ΔY/year = 0.025) and the supply of money grows by 10 percent (%ΔM/year = 0.10). a. According to the Quantity Theory of Money, what would be the growth rate of nominal GDP = P×Y? Hint: %Δ(X×Y)  %ΔX + %ΔY.
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Again, consider an economy with real output of 400 and an average price level of $2. While velocity and the price level are constant, this economy's real output is increasing by 1.25 percent per year. Recall also that the average dollar in this economy is spent 10 times over a year, Calculate the percentage change in the money supply this economy is experiencing. Enter your answer "as a percent, but without the percentage sign." Show an increase in the money supply with a positive number (no sign) and a decrease with a negative number (with negative sign). For example, if the money supply is falling by 99 percent, enter only -99 in the blank.
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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. Ginny spends all of her money on magazines and donuts. In 2015, she earned $14.00 per hour, the price of a magazine was $7.00, and the price of a donut was $2.00. Which of the following give the nominal value of a variable? Check all that apply. The price of a donut is 0.29 magazines in 2015. O Ginny's wage is 2 magazines per hour in 2015. O The price of a donut is $2.00 in 2015. Which of the following give the real value of a variable? Check all that apply. The price of a magazine is $7.00 in 2015. O Ginny's wage is $14.00 per hour in 2015. O The price of a magazine is 3.5 donuts in 2015. Suppose that the Fed sharply increases the money supply between 2015 and 2020. In 2020, Ginny's wage has risen to $28.00 per hour. The price of a magazine is $14.00 and the price of a donut is $4.00. In…