Questions Brief Background: COVID-19 initially started as supply-chain and demand shocks to U.S. firms as Chinese suppliers reduced their output and Chinese consumers slowed purchases of finished U.S. goods. This represented two initial shocks to U.S. firms. As COVID-19 spread to and throughout the U.S. a third set of shocks hit markets. These shocks came from local and regional shelter-in-place orders, telework, lower overall demand, business closures, policy decisions, and more. Two of the hardest hit sectors have been services (e.g., non-rural tourist destinations, hotels, & barbershops) and retail. 1. Labor As businesses suspended operations or closed, many laid off or let go of their employees. In the span of three weeks, over 10-million people applied for unemployment benefits. a. For those that lost jobs, what kind of unemployment does this represent? b. Suppose two restaurants close, one in an urban area and one in a rural area. i. How might unemployment differ for those that lost jobs in rural areas vs urban areas? c. One response to lower demand has been stimulus checks. This is money sent to people to spend or save as they see fit. i. How might this help reduce unemployment? ii. What generic solution(s) does this fit into and why