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

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

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter22: Money Growth And Inflation

Section: Chapter Questions

Problem 3QR

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