If the world supply of diamonds increases, the market price of diamonds decreases, and the consumer surplus derived by diamond consumers increases.
a. True
b. False
Indicate whether the statement is true or false
Question 2If the money supply increased by 4 percent and velocity increased by 4 percent:
a. nominal GDP would not change.
b. nominal GDP would increase by 1 percent.
c. nominal GDP would increase by 4 percent.
d. nominal GDP would increase by 8 percent.
Question 3A country with a low living standard can save easily.
a. True
b. False
Indicate whether the statement is true or false
Question 4If the world supply of diamonds decreases, diamonds become more valuable, and therefore, the consumer surplus derived from diamonds increases.
a. True
b. False
Indicate whether the statement is true or false
Question 5If the money supply grew by 6 percent and velocity fell by 2 percent, nominal GDP would:
a. fall by 4 percent.
b. rise by 4 percent.
c. rise by 8 percent.
d. rise by 12 percent.
Question 6A lack of current saving can be offset by borrowing, but the availability of borrowing is limited by the prospects for future saving.
a. True
b. False
Indicate whether the statement is true or false
Question 7If James is willing to sell an extra concert ticket for 40 and actually sells it for 100, his consumer surplus is 60.
a. True
b. False
Indicate whether the statement is true or false
Question 8Which of the following is false?
a. The money supply times velocity equals the price level times real GDP.
b. If individuals are writing lots of checks on their checking accounts and spending currency as fast as they receive it, velocity will tend to be high.
c. The magnitude of velocity does not depend on the definition of money that is used.
d. Velocity equals nominal GDP divided by the money supply.
Question 9If Ming is willing to pay 75 to attend the Broadway production of The Lion King but actually pays 40, she receives a consumer surplus of 35.
a. True
b. False
Indicate whether the statement is true or false
Question 10Poor countries grow faster than rich countries because of rapid growth in the labor force.
a. True
b. False
Indicate whether the statement is true or false
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