Question

Please write a 250 word post about the following:

1) Your personal experience with COV-19

2) The virus' impact on the economy from a microeconomic perspective: businesses, layoffs, decreased production and output

3) Suggestions for how businesses can cope over the next few months. Do you perceive a difference in the government's response for large corporations vs. small businesses, e.g. large corps speak directly to the President while small businesses have to apply for loans and various bailouts; business bailouts tied to not laying off workers.

Answer 1

1) Due to the COVID-19 pandemic, the everyday lives of every individual around the world including me are affected. I can't go to school which is affecting my social life. Fortunately, studies aren't affected because of online classes but these classes are no match to physical classes. I am trapped at home which means I cannot do my other activities but this quarantine is helping me to focus on things I always wanted to, I started reading novels which I was always too lazy to start but now since I don't have anything to do, I can do anything. When it all started, I thought I will pass the time with mobile phones and computers, playing games and watching movies but just after a week, I cannot look at my phone and suddenly there are no movies left in the world. Spending time with family and playing with then is helping a lot but I wonder if that will wear off in a week too or not. Reading, fortunately, is not getting boring rather the opposite. The one thing good this virus will give me is my new love for reading. I am not at my most productive nowadays but I think it's ok to be not at your most productive during a global pandemic. I like to think I will be a lot productive and will not stay at home after all this is over but maybe life will return back to normal sooner than I think for me.

2) But the virus has not affected me as much as it has affected the economy. Businesses ceased to produce things, businesses that are not deemed as an essential business are not allowed to continue operations. This decrease in output will lead to people losing jobs. A large number of people will lose their jobs if their government does not interfere. This will lead to a decrease in demand. Large cooperation can deal with this easily due to their size and their stash of money but the question is will they? Corporations usually buy back their shares to increase their share value and therefore the pay of their CEOs. the money which could be spent on workers' salaries at times like this but increasing share value is much more important. Small businesses will struggle to stay afloat and most of them will have to take loans to pay their workers or remove them. The demand will decrease even when all of this is over and supply will also be affected. People are likely to demand way less than they can because, in times like this, people save money to save themselves from unforeseen future. United Nations have said that the world can go into recession after this virus which makes sense because people will not buy things that is because they do not have a job which is because the production is low and owners cannot pay their workers. The best we can currently do is stay at home and hope all this is over so the impact on economy is less.

3) Businesses will go through a tough time in the coming months. There will be a fraction of demand for what they used to have. The workers and independent contractors are already jobless so they will stay afloat by lending or consuming their savings. This is low demand and low supply spiral. This spiral can be interfered with by using stimulus. Like the US govt giving $1200 to almost every taxpayer in the country. It will increase demand which can help the economy to lift itself up from this shock. The demand side is easy to solve compared to supply. To help with supply, the government bailout the companies which are on the brink of bankruptcy. both to save workers from getting jobless and increase production. Businesses who would not get bailed out will have a tough time in these trying times. The government can ease loan eligibility for these businesses. There is indeed a difference as to how large and small cooperation will be dealt with by the government. Large cooperations employ a large number of people and their leaders are powerful to get a bailout from the governments. US govt also has a small business bailout program where businesses can apply for a bailout which is a very good program but these businesses really need this money while large corps could have avoided it, had they planned in advance. Some businesses will still suffer as they may not use banking services as much.