The classical dichotomy is the separation of real and nominal variables. The following questions test your understanding of this distinction. Alyssa spends all of her money on comic books and donuts. In 2012, she earned $27.00 per hour, the price of a comic book 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. Alyssa's wage is $27.00 per hour in 2012. The price of a donut is 0.33 comic books in 2012. Alyssa's wage is 3 comic books per hour in 2012. Which of the following give the real value of a variable? Check all that apply. Alyssa's wage is 9 donuts per hour in 2012. The price of a comic book is $9.00 in 2012. Alyssa's wage is $27.00 per hour in 2012. Suppose that the Fed sharply increases the money supply between 2012 and 2017. In 2017, Alyssa's wage has risen to $54.00 per hour. The price of a comic book is $18.00 and the price of a donut is $6.00. In 2017, the relative price of a comic book is . Between 2012 and 2017, the nominal value of Alyssa'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.

Aeuropean aircraft producer has spent 15 years in developing a new aircraft that would potential threaten long-lasting boeing's dominance (monopoly) in the same class of aircrafts. the new european aircraft gets high marks on all performance measures except noise. because of the noise, the european producers management is concerned that the us government may impose restrictions which would forbid their aircraft to land in some of the american airports. without restrictions the estimated (present discounted) profit would be 125 million usd. with the restrictions the profit would only be 25 million usd. the chances of both outcomes are estimated to be 50-50. management must decide now whether to the cost of redesign program problem and a 60% chance it will fail. should the european aircraft producer start the noise redesign program if they do not have any redesign parts of the aircraft to solve the noise problem. is 25 million usd. there is a 40% chance that redesign will solve the noise additional information than mentioned above? draw the decision tree, indicate probabilities and outcomes of the events * imagine that the company could find out in advance the outcome of the u. s. government's e find the expected value of perfect information about the u. s. government's decision. decision. draw a new decision tree, indicate probabilities and outcomes of the events.