1. What economic theory/theories explain why only 29% of survey respondents reported spending their first stimulus check on consumption whereas 35% reported saving the check? Explain.

2. Gupta (2019) provides empirical evidence for social dynamics in foreclosures. He finds that each foreclosure filing leads to an additional 0.3 to 0.6 completed foreclosures within a 0.1-mile radius. Explain how housing price effects, credit supply effects, and peer effects can explain the finding.

3. Explain the significance of consumption in macroeconomics.

4. Elaborate why the US stock market boomed during the pandemic while more than 400,000 died from COVID-19.