The classical dichotomy divides macroeconomics into the study of _____ and:
A) real variables; nominal variables.
B) employment issues; price issues.
C) money supply; money demand.
D) production issues; spending issues.

Question

Quizplus · Accepted Answer

The classical dichotomy is a concept in macroeconomics that divides economic variables into real variables (those that do not depend on the overall level of prices, such as quantities of goods and services, employment levels, real GDP) and nominal variables (those that are measured in monetary terms and are affected by changes in the price level, such as the money supply, nominal wages, and nominal interest rates).

The Classical Dichotomy Divides Macroeconomics into the Study of _____