Question

The coronavirus (COVID-19) is affecting 210 countries and territories around the world. As of 18th July 2020, in Oman 62574 cases of COVID-19 have been reported, including 290 deaths. The coronavirus (COVID-19) outbreak is a major health crisis and disruptions to the global economy. The situation is getting severe due to lockdown as measure to contain the virus.

You are required to use aggregate demand and aggregate supply analysis, explain in detail how COVID - 19 affect each component of aggregate demand and aggregate supply of Oman’s Economy. Remembers marks are allocated based on detail explanation and in text citations using APA style! Minimum ½ page

In the national interest argument. It is sometimes argued that nation should not depend too heavily on other countries for supplies of certain key products. This argument has been made for commodities that are important to Oman economy. Discuss some arguments economists may raise against this. (5marks)

“Block Imports—Save Jobs for Some Omanis, Lose a Roughly Equal Number of Jobs for Other Omanis, and Also Pay High Prices.” Discuss this statement within the context of protectionism. (5marks)

Answer 1

You are required to use aggregate demand and aggregate supply analysis, explain in detail how COVID - 19 affect each component of aggregate demand and aggregate supply of Oman’s Economy. Remembers marks are allocated based on detail explanation and in text citations using APA style! Minimum ½ page.

COVID 19 has unquestionably devasted the world where no country is a specific exemption. Presently how about we break down the effects in Aggregate demand by segment astute.

Government spending : Owing to enormous disruption in the economy, government spending has expanded. Financial stimulus packages, PPE fabricating, medicinal services, and so on have added to the expanded government spending.

Consumption : This gives the domestic consumption made in Oman. Also, in many nations, this contributes around 60% of the aggregate demand. Because of the pandemic, the consumer spending has decreased due to the negative viewpoint of things to come, diminished pay rates and permanent layoffs much of the time. The individuals of Oman spend their savings absent a lot of income to add on. Along these lines they attempt to consume less inferable from the depleting savings.

Net exports : Exports short imports. Now, international trade is abandoned. Oil being one of the significant exports of Oman have not been effectively traded inferable from the lesser demand. The nations trading right now are the individuals who are producing medications, PPEs, test kits, and so on. Oman not particular with this has a restricted fare and because of the shortage in these neccessary commodity they import the equivalent from different nations. Subsequently the nett exports goes negative, or decreases.

Private Investment : This alludes to the gross development of fixed capital. With the negative market suppositions and parcel of modern, business just as wellbeing limitations, these investments have endured a shot. Assembling has been low that it can't enhance the plan of the investment. In this way, the investment decreases. In certain nations, there are dynamic investments going on also, not in the situation of Oman.

- Aggregate Supply is the money value of the total consumption occurred in an economy. Parts of Aggregate Supply are:

Savings : This can be found in two different ways. Because of layoffs and paycuts, the consumers spare more than previously. Yet, then again, these savings are being used to get by, in this manner diminishing the savings. Along these lines, as I would like to think I would state, the last overwhelms, so the savings decrease.

National income : This structures the whole of the considerable number of wages, leases, profits and interests. As we probably am aware, the wages have dropped enormously including profits, and with individuals not having enough money, the premium installments are being defaulted too. Subsequently the national income part of the AS decreases.

In the national interest argument. It is sometimes argued that nation should not depend too heavily on other countries for supplies of certain key products. This argument has been made for commodities that are important to Oman economy. Discuss some arguments economists may raise against this.

Take a view at the AD-AS curve.

The shift in the aggregate demand is towards the left, demonstrating a lofty fall in the real GDP from Y1 to Y2 because of the diminished consumption as clarified in the past areas. Therefore, the short run aggregate supply moves upwards and fulfills the new need curve at a point where the equilibrium prices are higher than expected.

At the point when real GDP of Oman decreases, the output is decreased. As a result of lower output in these conditions, the quantity of workers/representatives expected to play out the undertaking is less than optimal. Consequently firms start to cutback workers causing a flood in unemployment. Every one of these components recommend us the economic growth is stumbling.

“Block Imports—Save Jobs for Some Omanis, Lose a Roughly Equal Number of Jobs for Other Omanis, and Also Pay High Prices.” Discuss this statement within the context of protectionism. (5marks)

Protectionism refers to the policy of protecting the doesmtic producers from the imports by taxing the imports and reducing them by tariffs , quotas etc.

When a country imports goods or services from other countries, the domestic price of the good falls. This reduces the quantity demanded as well as the profits of the domestic producers. When domestic producers face a falling profit and lowe demand, they hire fewer workers and many people lose their jobs. Therefore, blocking import helps in saving some jobs. However, blocking imports harm many other firms who depend on cheap imports to reduce their costs. When the import is blocked, these firms face higher costs and less profit. Therefore, these firms hire fewer workers and some people lose jobs.

please like the answer...Hope its helpful...