Economics · Macroeconomics
Classical Dichotomy refers to which of the following concepts?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The idea that money supply and interest rate are determined simultaneously in the money market
- 2The independence of real variables (output, employment, real wages) from changes in money supply and nominal variables — i.e., the real and nominal sectors can be studied separately✓
- 3The division of consumption into autonomous and induced components
- 4The division of national income into factor income and transfer income
Correct answer
The independence of real variables (output, employment, real wages) from changes in money supply and nominal variables — i.e., the real and nominal sectors can be studied separately
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