Debbie and Alex Formed a New Partnership

question 5

Multiple Choice

Debbie and Alex formed a new partnership.The partnership agreement specified that income should be allocated in a 2-to-1 ratio,with Debbie receiving the larger portion.If revenue for the first year was $90,000 and expenses were $60,000,how much would be allocated to each partner?

• A)Debbie-$45,000;Alex-$45,000
• B)Debbie-$20,000;Alex-$10,000
• C)Debbie-$60,000;Alex-$30,000
• D)Debbie-$40,000;Alex-$20,000

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Definitions:

Classical Dichotomy

The theoretical separation of nominal and real variables in the economy, suggesting that changes in the money supply only affect nominal variables.

Nominal Variables

Economic variables measured in current prices, without adjusting for inflation, reflecting their value in terms of current money.

Real Variables

Economic variables that have been adjusted for inflation, allowing for the comparison of quantities over time.

Monetary Neutrality

The idea that changes in the money supply only affect nominal variables and have no long-term impact on real variables like output or employment.