Question

Discuss five macroeconomics objectives in the context of the Covid19 pandemic

Answer 1

Macroeconomics refers to studying the economy as a whole. So, while considering the objectives of macroeconomics we consider the factors in terms of an objective that affect the maximum population of a given economy. With the outbreak of COVID 19 pandemic, the worldwide economy has shaken badly be it in terms of exchange rates, production capacity, employment, etc. Let's discuss five of these objectives in the context of the pandemic.

1. Inflation

The objective of macroeconomic policies is to maintain a rate of inflation that is neither too high to hamper consumer's purchasing power nor too low to reflect low economic growth. But, in the crisis due to coronavirus, we have been stuck in the case where there is low demand for goods and services along with high inflation. The objective of the policy is required to meet the consumer expectations along with protection to economic growth.

2. Economic Growth

Economic Growth is the rate that reflects the growth of an economy in monetary terms. This increases with an increase in net exports, production of goods and services, demand for domestic goods, etc, and decreases with increase in imports, transfers, etc. With this pandemic came a fear among people which made them spend less and consume less. This in turn has led to fallen demand and then reduced supply. Thus pulling the economic growth backward and making the demand and supply chain shorter.

3.Exchange Rate

This brought a significant fall in exchange rates of major economies of the world except for China. While all other countries are falling short to satisfy the demand of their territory China is now in the position to export the goods produced by it. Now, countries have to bear this shortage of supply with the opportunity cost of falling exchange rates. It is expected from macroeconomic policymakers to frame such policies which will once again bring investors in a position to create such portfolios which will reduce their losses. This will bring stability in equity markets and exchange rates

4. Unemployment

The framework of an economy is made such that there is enough employment for every individual who is willing to work. Post COVID19 outbreak, the pool of willing individuals has reduced along with reduced demand for them. This has widened the gap between eligible individuals and the availability of jobs. This clearly reflects the movement of an economy towards a crisis.

5. Safeguarding the Environment

The Green GDP involves the growth of an economy with environmental sustainability. The only good thing that happened in this pandemic is the betterment of environment around. Post Amazon Forest fire, it was nearly impossible to control the rising air pollution with a fast-moving society. But, due to lockdown, there is low pollution. And animals have got a better environment to live in. This has made us realize that earth is as much ours as theirs.

These were the five objectives that are discussed considering the outbreak of the pandemic.