The Lock­in Effect

question 61

Multiple Choice

The lock­in effect

• A)​allows stocks to be priced efficiently.
• B)will be smaller in magnitude if tax rates are lower.
• C)​is likely to reduce the volume of stocks being traded in a market.
• D)​states that when stock prices rise, they will continue to do so for prolonged time periods.

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Definitions:

Truck Differential

A mechanical device in a truck that allows the outer drive wheel to rotate faster than the inner drive wheel during a turn, improving traction and handling.

Tandem Drive Truck

A truck with two rear axles, both of which are drive axles, providing better traction and load distribution.

Spinout

Occurs when differential action allows one drive wheel on a slippery surface to spin while the other remains stationary and receives no driving torque. On tandem drive trucks, because of the additional differential action between the drive axles, it is possible to turn a spinning wheel at four times its normal speed. This can take out the interaxle differential or carrier differential. Spinout is a driver abuse failure of differential carriers.

Loss of Traction

A situation where the tires of a vehicle fail to grip the road surface, resulting in loss of control.