Question

Describe macroeconomics today and COVID-19.

Answer 1

Macroeconomics simply checks on the performance of the economy, putting focus on aggregate changes in gross domestic product, unemployment rates, inflation, government deficits and the general growth rate of the economy.

Some of the goals of the macroeconomics include improved living standards, low unemployment rates and low inflation. Looking at the macroeconomic goals today, COVID-19 has had a lot of impact on these goals, many being affected negatively and most of the macroeconomic goals cannot be achieved easily.

Explanation:

We can look at the impacts that COVID-19 has on these macroeconomic goals.

Looking at the unemployment rates which is one of the greatly affected macroeconomic goal, due to COVID-19 many people have lost their jobs due to reduced level of economic activities, travel restrictions, low production of industries. Companies not being in a position to generate enough revenue, they cannot keep their employees. Unemployment is on the rise and many governments are putting in place measures to help cushion the citizens. The macroeconomic policies such as the fiscal policies and the monetary policies are being put in place to revive the slowing economy and help reduce the rising unemployment rates.

The gross domestic product of many nations is on the decline. This is as a result of the COVID-19, the economy is not performing at its maximum. The resources are therefore not being utilised fully, due to reasons such as travel restrictions to help stop the spread of the virus.

COVID-19 had strong impacts on the market like quarantines, closed plants, disturbances to the supply chain and reduced mobility obviously affect production. It is more difficult to gage the impact on demand, but it is important from an economic policy point of view to get a sense of them because we have more faith in how to cope with demand through monetary and fiscal instruments than with deficiencies in supply. Changes in real-life prices of products may indicate that COVID-19 is having significant effects on demand. Actually, if aggregate supply effects exceed the effects of demand, we will see prices increasing as production goes down, in a sort of echo of the 1970s stagflation. At the time, central banks were in a struggle about whether to increase rates to counter inflation or to lower rates to boost economic activity. If prices remain largely unchanged we can conclude that the spread of the virus has also affected aggregate demand significantly. Of example, due to the statistical and economic lags, applicable consumer price index information will not be available for a number of months. The only timely replacements are the prices of raw materials and the predictions of ruptured inflation.