Question

1.Briefly explain the current state of your economy and then briefly explain the current state of the U.S exonomy.

2. What else is inportant to know about your economy? Has anything changed because of Covid-19?

Answer 1

Solution-

1)

Covid-19 pandemic has brought the economic activities to a standstill and affected the world economy severely. The Indian economy has not escaped from this pandemic and halted the growth of the nation.

High-frequency indicators suggest that August was the best month for the economy since the imposition of nationwide lockdown on March 25.

This trends should be seen as a sequential improvement rather than a return to pre-pandemic levels of economic activities.

The Indian government has an uphill task in hands as to how to curb this recession as an increase in investment is likely to increase inflation. Indian economy is still far from pre-pandemic levels. Based on recent studies, some economists have said that there is a job loss of 40 million people in the country, mostly in the unorganised sector.

The quarterly GDP growth has consistently fallen since Q4 of FY1 8. From of7% GDP growth has fallen to 4.2% in 19-20 financial year. OveralIndianan economy is s dire need of reform now and needs urgent impetus.

The current state of U.S economy-

Economic activity appears to have recovered robustly in 3 after GDP contracted the t fastest pace on record in Q2 due plunging in domestic demand amid covid 19 containment measures.in August the unemployment rate dropped 1.8%. The economy is expected to contract notably this year due to a higher unemployment rate and consumer confidence weighing

This on private consumption. Next year GDP should rebound on the back of monetary and fiscal stimulus and as the impact of the pandemic fades.U.S- China trade tensions are key downside risk. The US economy shrank by an annualized 31.4% in the second quarter of 2020, slightly lower than a 31.7% plunge.

2)

Many things are important to know in the economy such as fiscal deficit, purchasing power parity of people, growth, population etc.

Covid -19 has affected all these things severely, for example, unemployment has left many people in dilemma it means people have no jobs.No jobs result in less money in hands and less money reduces peoples purchasing capacity.less purchasing capacity means no demand in the market and no demand means no production and ultimately no employment.so, this is a vicious cycle of the economy and unbalance in any sector will lead downfall.