Janet spends all of her money on paperback novels and beignets. In 2014, she earned $14.00 per hour, the price of a paperback novel was $7.00, and the price of a beignet was $2.00. Which of the following give the nominal value of a variable? Check all that apply. 1-Janet's wage is $14.00 per hour in 2014. 2-The price of a beignet is 0.29 paperback novels in 2014. 3-The price of a beignet is $2.00 in 2014. Which of the following give the real value of a variable? Check all that apply. 1-Janet's wage is 7 beignets per hour in 2014. 2-The price of a paperback novel is $7.00 in 2014. 3-The price of a paperback novel is 3.5 beignets in 2014.
- 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.
Janet spends all of her money on paperback novels and beignets. In 2014, she earned $14.00 per hour, the
Which of the following give the nominal value of a variable? Check all that apply.
1-Janet's wage is $14.00 per hour in 2014.
2-The price of a beignet is 0.29 paperback novels in 2014.
3-The price of a beignet is $2.00 in 2014.
Which of the following give the real value of a variable? Check all that apply.
1-Janet's wage is 7 beignets per hour in 2014.
2-The price of a paperback novel is $7.00 in 2014.
3-The price of a paperback novel is 3.5 beignets in 2014.
Suppose that the Fed sharply increases the money supply between 2014 and 2019. In 2019, Janet's wage has risen to $28.00 per hour. The price of a paperback novel is $14.00, and the price of a beignet is $4.00.
In 2019, the relative price of a paperback novel is …………………
Between 2014 and 2019, the nominal value of Janet's wage…………….., and the real value of her wage …………………
Monetary neutrality is the proposition that a change in the money supply…………. nominal variables and……………………. real variables.
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