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3. The classical dichotomy and the neutrality of money The classical dichotomy is the separation of real and nominal variables. The following questions test your understanding of this distinction. Neha spends all of her money on paperback novels and donuts. In 2014, she earned $27.00 per hour, the price of a paperback novel was $9.00, and the price of a donut was $3.00. Which of the following give the nominal value of a variable? Check all that apply. C] Neha's wage is 3 paperback novels per hour in 2014. C] The price of a donut is 0.33 paperback novels in 2014. The price of a donut is $3.00 in 2014. which of the following give the real value of a variable? Check all that apply. Neha's wage is $27.00 per hour in 2014. The price of a paperback novel is $9.00 in 2014. The price of a paperback novel is 3 donuts in 2014. Suppose that the Fed sharply increases the money supply between 2014 and 2019. In 2019, Neha's wage has risen to $54.00 per hour. The price of a paperback novel is $18.00 and the price of a donut is $6.00. In 2019, the relative price of a paperback novel is 3 donuts v . Between 2014 and 2019, the nominal value of Neha's wage increases v , and the real value of her wage remains the same V . Monetary neutrality is the proposition that a change in the money supply affects Y nominal variables and does not affect V real variables