Poornima spends all of her money on comic books and beignets. In 2009 she earned $15.00 per
Question:
Poornima spends all of her money on comic books and beignets. In 2009 she earned $15.00 per hour, the price of a comic book was $5.00, and the price of a beignet was $3.00.
1. Which of the following give the nominal value of a variable? Check all that apply.
a) Poornima's wage is 3 comic books per hour in 2009.
b) Poornima's wage is $15.00 per hour in 2009.
c) The price of a beignet is $3.00 in 2009.
2. Which of the following give the real value of a variable? Check all that apply.
a) Poornima's wage is $15.00 per hour in 2009.
b) Poornima's wage is 5 beignets per hour in 2009.
c) The price of a comic book is 1.67 beignets in 2009.
3. Suppose that the Fed sharply increases the money supply between 2009 and 2014. In 2014, Poornima's wage has risen to $30.00 per hour. The price of a comic book is $10.00 and the price of a beignet is $6.00.
In 2014, the relative price of a comic book is______________.
Between 2009 and 2014, the nominal value of Poornima's wage________________ and the real value of her wage.
Monetary neutrality is the proposition that a change in the money supply__________ nominal variables and__________ real variables.
Expert Answer:
