The classical dichotomy is the separation of real and nominal variables. The following questions test your understanding of this distinction. Susan spends all of her money on magazines and mandarins. In 2015, she earned $18.00 per hour, the price of a magazine was $9.00, and the price of a mandarin was $2.00. Which of the following give the nominal value of a variable? Check all that apply. Susan's wage is $18.00 per hour in 2015. Susan's wage is 2 magazines per hour in 2015. The price of a mandarin is $2.00 in 2015. Which of the following give the real value of a variable? Check all that apply. Susan's wage is 9 mandarins per hour in 2015. Susan's wage is $18.00 per hour in 2015. The price of a magazine is 4.5 mandarins in 2015. Suppose that the Fed sharply increases the money supply between 2015 and 2020. In 2020, Susan's wage has risen to $36.00 per hour. The price of a magazine is $18.00 and the price of a mandarin is $4.00. In 2020, the relative price of a magazine is . Between 2015 and 2020, the nominal value of Susan'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.

Macroeconomics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506756

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter8: Economic Fluctuations, Unemployment, And Inflation

Section: Chapter Questions

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The classical dichotomy is the separation of real and nominal variables. The following questions test your understanding of this distinction.

Susan spends all of her money on magazines and mandarins. In 2015, she earned $18.00 per hour, the price of a magazine was $9.00, and the price of a mandarin was $2.00.

Which of the following give the nominal value of a variable? Check all that apply.

Susan's wage is $18.00 per hour in 2015.

Susan's wage is 2 magazines per hour in 2015.

The price of a mandarin is $2.00 in 2015.

Which of the following give the real value of a variable? Check all that apply.

Susan's wage is 9 mandarins per hour in 2015.

Susan's wage is $18.00 per hour in 2015.

The price of a magazine is 4.5 mandarins in 2015.

Suppose that the Fed sharply increases the money supply between 2015 and 2020. In 2020, Susan's wage has risen to $36.00 per hour. The price of a magazine is $18.00 and the price of a mandarin is $4.00.

In 2020, the relative price of a magazine is .

Between 2015 and 2020, the nominal value of Susan'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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