Sentence:  All of this previous analysis was based on two related ideas: the classical <WSD>dichotomy</WSD> and monetary neutrality. Recall that the classical <WSD>dichotomy</WSD> is the separation of variables into real variables (those that measure quantities or relative prices) and nominal variables (those measured in terms of money). 
Meaning of the word marked with <WSD> tags:  A separation or division into two; a distinction that results in such a division.