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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. Megan spends all of her money on comic books and beignets. In 2010 she earned $18.00 per hour, the price of a comic book was $9.00, and the price of a beignet was $1.00. Which of the following give the nominal value of a variable? Check all that apply. Megan's wage is $18.00 per hour in 2010. The price of a beignet is 0.11 comic books in 2010. Megan's wage is 2 comic books per hour in 2010. Which of the following give the real value of a variable? Check all that apply. Megan's wage is 18 beignets per hour in 2010. The price of a comic book is $9.00 in 2010. Megan's wage is $18.00 per hour in 2010. Suppose that the Fed sharply increases the money supply between 2010 and 2015. In 2015, Megan's wage has risen to $36.00 per hour. The price of a comic book is $18.00 and the price of a beignet is $2.00. In 2015, the relative price of a comic book is . Between 2010 and 2015, the nominal value of Megan'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.
If the demand for used cars decreases after the price of a new car fallls, used cars and new cars are
Suppose the price elasticity of demand for bread is 1.00. If the price of bread falls by 20%, the quantity demanded will increase by: Suppose that a 20% decrease in the price of good Y causes a 20% increase in demand for good X. The coefficient of cr..
What is happening to the value of the U.S. dollar these days? What causes the value of the U.S. dollar to rise or fall? Who demands U.S. dollar? Who supplies U.S. dollar? When we purchase German products, does our demand for euro go up or down? What ..
Write a 1- to 2-page paper identifying the various parts of your chosen country’s Political Economy. Explain how this system developed over time and any changes you may foresee for the near future. Cite resources as appropriate to support your commen..
The required reserve ratio is 10 percent, a bank has checkable deposits of $200 million and excess reserves of $100 million. Assuming the bank is meeting its reserve requirement, what amount is the bank holding in reserves?
Past sales show that when a scanner is priced at $175, the quantity demanded is 350 units per week. For each $5 drop in price below $175, the quantity demanded rises by 50 units per week. The manufacturer will not market any of the devices if the pri..
Where there currently is a tariff. What is the effect of this tariff on the U.S. economy.
You should recommend that the project be rejected because, although its NPV is positive, its MIRR is less than the WACC, and that indicates that the firm's value will decline if it is accepted.
A temporary supply shock, such as a drought, would
Suppose that survey measures of consumer confidence indicates a wave of pessimism is sweeping the country. If policymakers do nothing, what will happen to aggregate demand? What should the Fed do if it wants to stabilize aggregate demand? If the Fed ..
On the same day, the San Francisco Chronicle had an article with the headline "Sharp Drop in Bay Area Home Sales"
How much the quantity of a good traded changes after a shift of the supply curve depends on the size of the shift.
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