Question

One of the factors that impact economic growth is changes to structure of economic production. Some examples of this include: changes in the relative demands for different goods and services, changes in technology, changes in the relative prices of raw materials, and changes in the sectoral composition of production. During the health pandemic we saw temporary examples of how firms switched to production from their usual business products to the production of health goods such as masks, alcohol, sanitizer etc. to respond to the spike in demand for these goods and the economic environment, which perhaps resulted in the demand for their own goods suddenly disappearing.

Discuss how you think the sectoral composition of production in Canada may change more permanently post- COVID-19.

Answer 1

Worldwide pandemic of COVID-19 has changed the composition of the economy of every country in this world. Demand pattern of each market has shifted from regular products to the products which are acting as a safety measures from this pandemic such as sanitizers, masks, gloves etc. These products have become necessities for each person in the world. On the other hand, process of lock down has devastated the business in each industry. Due to which real income of each person has taken a very drastic dip. Due to lock down phase priorities of people have changed. People are spending their money on products of crucial importance. Due to change in the demand of consumers producers have also shifted to the production of the products which are being demanded by the consumers in the market.

This pandemic will have very long term effect on the world. Post COVID-19 the production pattern will be same as during the pandemic i.e. production of products used as safety measures as well as necessities will be given more importance over any other product. This will last till the virus totally disappears from the world.

In Canada also post COVID-19 the composition of the production will change to the production of safety products and other necessary products over any other product till the elimination of the impact of virus from the country. As soon as the impact will be eliminated from the country as soon as the economy will be back to the position pre-COVID-19.