Exam 14: Transmission and Amplification Mechanisms

When more people shop during weekends instead of weekdays it is called:

What do we call a cluster of activity in space?

Which of the following represents a collateral shock?

During the most recent recession,the economy experienced what many called a credit crunch.Investment funds dried up,and banks were not lending.Many people who wanted to (and could afford to!)buy homes during the housing market collapse could not obtain a loan to do so.In addition,before the recession,many homeowners had outstanding lines of credit (basically a loan)on the equity in their homes.This meant that they could borrow money against the equity they already had accumulated in their homes for things like home improvements and other projects.During the recession,however,many of these lines of credit were eliminated,leaving people with no available credit.Explain what transmission mechanism this is and how it contributed to the severity and duration of the recession.

A collateral shock refers to a reduction in:

Intertemporal substitution:

Historical data on India's rainfall amounts and real GDP growth show that:

Which of the following is the best example of intertemporal substitution?

Time bunching causes shocks to spread through the economy.

The cost of shifting workers from declining sectors of the economy to growing sectors is known as:

What best explains the increases in economic activity that coincides with spring?

The supply of labor:

Tom works as an editor for a textbook company and devotes some of his time to his dream of writing a novel.Will he devote more time to writing the novel when the textbook company is busy and pays him overtime or when work is slow and no overtime pay is available?

A homeowner's home that was purchased for $125,000 before the housing crisis is experiencing the greatest collateral damage from the recession at which of the following appraisal values?

Which of the following is a transmission mechanism?

When people like going to Walmart right after work because it has the most employees working at the check-out counters at that time,they are contributing to the practice known as:

A house is said to be underwater if the market value of the house is:

Firms are most likely to experience collateral damage during a(n)_____,and their borrowing and investment activities will _____ its severity.

_____ have high value only under specific conditions.

What are labor adjustment costs? Give an example of how they will make a negative shock worse.