The idea that nominal variables are heavily influenced by the quantity of money and that money is largely irrelevant for understanding the determinants of real variables is explained by the
A)velocity concept.
B)Fisher effect.
C)classical dichotomy.
D)Mankiw effect.

Question

Quizplus · Accepted Answer

The classical dichotomy is the concept in classical economics that posits a clear division between real and nominal variables, suggesting that nominal variables are influenced by the quantity of money in the economy, while real variables (like output, employment, etc.) are determined by technology, resources, and preferences, independent of money's influence.

The Idea That Nominal Variables Are Heavily Influenced by the Quantity