Question

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 comic books and mandarins. In 2009 she earned $27.00 per hour, the price of a comic book was $9.00, and the price of a mandarin was $3.00.
Which of the following give the nominal value of a variable?
A) Susan's wage is 3 comic books per hour in 2009.
B) The price of a mandarin is 0.33 comic books in 2009.
C) The price of a mandarin is $3.00 in 2009.

Answer 1

The price of a mandarin is $3.00 in 2009.

Step-by-step explanation:

The classical dichotomy is an economic theory that postulates that ( real variables e.g. output and employment, are independent of monetary variables e.g. price