According to the classical dichotomy, real variables are determined by _____, and nominal variables are determined by:
A) resources and technology; monetary policy.
B) monetary policy; resources and technology.
C) supply and demand; production.
D) production; supply and demand.

Question

Quizplus · Accepted Answer

The classical dichotomy separates economic variables into real variables, which are determined by resources and technology, and nominal variables, which are influenced by monetary policy. This distinction is foundational in classical economics, emphasizing the difference between the physical (real) and monetary (nominal) aspects of the economy.

According to the Classical Dichotomy, Real Variables Are Determined by _____