DO NOT EXPLAIN JUST TYPE THE LETTER. HURRY PLEASE.

People engage in intertemporal substitution because they:

Select one:

a.

wish to reduce the overall number of hours they work.

b.

seek to maximize their well-being.

c.

are irrational.

d.

always prefer leisure to work.

Labor adjustment costs lead to:

Select one:

a.

intertemporal substitution.

b.

time bunching.

c.

higher unemployment.

d.

higher employment.

Adam is unemployed and can try to find another job as a bank teller, or he can go back to school for 2 years and become a nurse. Nursing jobs are easy to find and nurses are better paid than bank tellers. Why must he think carefully before making this career change?

Select one:

a.

Bank tellers are a dying profession.

b.

He doesn't like his current career.

c.

Student loans are easy to secure.

d.

Nursing school is an irreversible investment.

Economic activities tend to cluster in time because:

Select one:

a.

it pays to coordinate economic activities with those of others.

b.

of the vertical LRAS curve.

c.

of labor unions.

d.

it is legally required.

_____ have high value only under specific conditions.

Select one:

a.

Intertemporal reserves

b.

Permanent assets

c.

Irreversible investments

d.

High-growth prices

A transmission mechanism:

Select one:

a.

mitigates shocks by spreading them across time and through sectors of the economy.

b.

amplifies shocks by spreading them across time and through sectors of the economy.

c.

causes shocks to have an equal impact across time and sectors of the economy.

d.

turns negative shocks into positive shocks over time.

If students decide to stay in college until a recession is over, they are practicing:

Select one:

a.

intertemporal substitution.

b.

time bunching.

c.

labor adjustment costs.

d.

replacement wages.

For a given negative economic shock, an economy with higher labor adjustment costs will have a:

Select one:

a.

higher economic growth rate.

b.

smaller effect on employment.

c.

higher unemployment rate.

d.

shorter recession.

When GDP is growing faster than trend, the employment-to-population ratio tends to grow:

Select one:

a.

faster than trend.

b.

more slowly than trend.

c.

at its trend level.

d.

unpredictably.

Uncertainty tends to keep resources:

Select one:

a.

in more productive uses.

b.

in less productive uses.

c.

fully employed.

d.

moving from country to country.

Labor supply tends to:

Select one:

a.

remain constant during recessions.

b.

remain constant during booms.

c.

increase during recessions.

d.

increase during booms.

If a real shock causes a particular sector of the economy to decline, associated labor adjustment costs will _____ the effect of the initial shock.

Select one:

a.

amplify

b.

dampen

c.

not influence

d.

eliminate