Question

Covid -19

1. state & explain the economic problem/s

2.why you have chosen your topic

3. What is the aggregate demand concerns regarding the topic/ who will be impacted

4. What are the positive & negative externalities, if any

5. What are your recommendations (effective/creative) provide at least 2 - 3

6. What are the alternatives ( effective/creative) provide at least 2 - 3

7. What are your solutions ( effective/ creative)

Paper length will be at minimum a 2 paged, word processed, hand - delivered paper.

Answer 1

1.

COVID-19 has hit most of the economies very hard in economic terms. In order to stop the spread of the virus most of the businesses, small and large, have been closed. Lockdown measures have disrupted the aggregate supply as well as demand.

Therefore we can say that the main economic problems are closure of businesses leading to disruption in supply as well demand, fall in government revenues, shutting down of businesses leading to layoffs and massive unemployment.

2.

The reason I have chosen this topic is because it is certainly most important thing going on in the world at the moment. The central most important thing in economics is to maintain equilibrium between supply and demand of goods and services, labor etc. Due to the Corona virus all these equilibriums have been destabilised. The world is looking at recessions that has never been seen before historically.

It is very important to know and understand the repurcussions and how it can be managed effectively.

3.

As mentioned above massive unemployment numbers reaching as high as 15% and also lockdown of shops and other businesses has prevented people from spending even on essential items. This has resulted in steep fall in aggregate demand. Those who have become jobless will not be able to spend, and whatever money they are left with, they will save rather than spend, all this has led to fall in aggregate demand.

4.

Positive externalities are improvement of medical infrastructure and services in both public and private sectors, research and development of vaccines and also fall in environment pollution across the world.

Negative externalities could be loss of education opportunities to the students, loss of mental peace due to job losses, and reduction of investment on infrastructure for roads, railways, and housing etc.

5.

My recommendations are follows:-

( I ) Government should provide income support to those who lost jobs.

( II ) Fiscal measures should be taken to resucitate the economy.

( III ) Small businesses should also be saved from collapsing with bank guarantees being provided by the government.