Question

ESSAY [40 MARKS]

Due to COVID-19 pandemic, the consumer purchasing decision making has significantly altered to the new consumers' lifestyle surrounding and circumstances.

do you agree with the statement above and explain your answer to support your point of view with the relevant examples

Answer 1

Yes,most of the reason for the normal recession revolved around the instability of the banking or financial sector whereas the current downturn is a result of a conscious decision taken by authorities to contain the health crisis. Unlike the others which impacted aggregate demand first, the virus led to a complete shutdown of industries, firms, and organizations inducing an economy into supply shock hence the prolonged duration of the shut down put the economy into demand shock. This has impacted the small businesses drastically as a coffin maker in Afghanistan bluntly stated that although people are dying his business is still negatively affected as people are burying using cotton as don't have enough money to purchase a coffin. Today the online delivery sector or the gig economy like Flipkart, dunzo, or even big basket has been seeing an upswing in their demand and has been trying to meet the supply. Airlines reducing the flights has definitely helped the environment as it reduced the level of air pollution but more with the context of economics as due to the cut on flights, there is a fall in revenue for the airline industry which also pushed down the demand for oil. Due to the fall in revenue, there is increased layoffs causing unemployment. Unemployment also results in a fall in purchasing power which on a larger scale impacts the GDP and national income of an economy as people don't have the money to purchase goods and services. The negative implication of the lockdown policy has been predominantly on the migrant workers who were left homeless and poverty-stricken due to no wage and no travel as India has a high number of daily wage workers who have migrated from different parts, today they are being supplied with food and shelter by governments and individuals.