Macroeconomics 1st Edition by Dean Karlan,Jonathan Morduch

تمرين 25

To increase the self-esteem of dieters everywhere, powerful fashion designers lobby Congress to redefine "five pounds" as "one pound." Under this system, what would have previously been five pounds of bananas will now be one pound of bananas and a 500-pound gorilla would now weigh only 100 pounds.
a. How much would someone who originally weighed 180 pounds now weigh as a result of this redefinition?
b. Has there been a nominal change in the person's weight? A real change?
c. How is this story similar to contractionary monetary policy via a decrease in the money supply in the long run? ( Hint: Congress essentially shrunk the "pounds supply" by redefining the word.)