According to the classical dichotomy, which of the following is not influenced by monetary factors?
A)nominal GDP and nominal interest rates
B)real wages and real GDP
C)the price level and nominal GDP
D)None of the above is correct.

Question

Quizplus · Accepted Answer

According to the classical dichotomy, real variables such as real GDP and real wages are determined by non-monetary factors such as technology, resources, and productivity, and are not influenced by monetary factors. On the other hand, nominal variables such as nominal GDP and nominal interest rates are determined by monetary factors such as money supply and inflation. Therefore, choice B, which only includes real variables, is not influenced by monetary factors.

According to the Classical Dichotomy, Which of the Following Is