Question

1. Using other credible websites, determine the impacts of COVID-19 on the economy.

Address the following key points - impact on the following:

1. Aggregate Demand Curve
2. Aggregate Supply Curve
3. Fiscal Policy Response
4. Monetary Policy Response
5. Key Industry Impacts – Airlines, Cruise Lines, Hospitality (Restaurants/Hotels/Motels), Theme Parks, Sports, and Meat Production

Post two paragraphs with at least one credible source (citation) regarding the impact on these key industries.

Answer 1

According to International Monetary Fund, the global economy is expected to shrink by 3%, which is the steepest since the great depression of 1930.

The World Health Organization characterized Covid 19 as a global pandemic. The infection has not only become a health crisis but also it has affected the global economy brutally. Due to lockdowns being imposed in countries and restrictions being placed, many countries has taken economic hit. It has resulted in the premature loss of life, business closures, trade disruptions and it has heavily affected tourism industry due to travelling restrictions.

Consumers spending habits has changed due to decreased income and increased household finances. With the fear and panic and uncertainty of when the pandemic will end, the demand has decreased significantly. People want to hold on to their savings rather than spend them.

Due to workplace restrictions, premature deaths, reduction in productivity, and panic among the employees it has created negative supply chain, due to manufacturing activity slowing down and disruption in the global supply chain and closure of many industries.

The tourism, transportation and food industry has been heavily impacted due to travel restrictions and are the worst affected sectors due to covid 19. This has resulted into heavy losses and unemployment on a large scale.