Suppose a High-Speed Rail System Is Proposed That Will Save

question 7

Multiple Choice

Suppose a high-speed rail system is proposed that will save commuters from the suburbs a lot of valuable time.If the high-speed rail system is built,the value of homes in the suburbs will increase because of the easier commute.When estimating the potential benefits of the high-speed rail system:

• A) it is important not to double count benefits since the rise in home values is caused by the time savings.
• B) it is important to count both the rise in home values and the value of time saved by commuters.
• C) neither the rise in home values nor the value of time saved by commuters is considered a benefit of investing in the high-speed rail system.
• D) the increased value of suburban homes is considered a cost rather than a benefit.

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Definitions:

Price Level

An index that measures the average price of consumer goods and services, reflecting the purchasing power of a country's currency.

Foreign Exchange Rate

The price at which one currency can be exchanged for another in the international currency markets.

Velocity

In economics, the rate at which money circulates in the economy, typically measured as the ratio of gross national product to the total supply of money.

Money Supply

The sum total of available financial assets in an economy at a particular time slot.