A Classical Dichotomy Refers to the Fact That

Multiple Choice

A classical dichotomy refers to the fact that

A) classical theory predicts negative effects of high inflation.
B) the real variables in the model are determined independently of the money market.
C) the real variables are jointly determined depending on what happens in the money market.
D) the real interest rate differs from the nominal interest rate.
E) real and nominal variables are often different.