Question

Has your opinion of capitalism changed during the COVID-19 crisis? How has your perception of society been affected by living through a devastating health and economic crisis?

Answer 1

Dear Student,

Below is the answers to your question

Yes definatly capitalism changed during the COVID-19 crisis

In following way society been affected by living through a devastating health and economic crisis

1) Mobilizing available public resources

These included mobilizing available public resources to augment what private citizens are doing to help the poor and vulnerable; working on some of the national macro-economic levers to sustain businesses; and discussing with international creditors about canceling – or rescheduling – repayments, of some of their debts

2) Change in Production Pattern

Trade will also be affected by changes in production patterns. Over the last two decades the thrust for improved efficiency and productivity has driven manufacturing, as well as many service industries, towards minimizing costs

3) Increase in Government Debt

budget deficits accumulate into government debt, and current account deficits accumulate into foreign debt. The model imposes an intertemporal budget constraint on all households, firms, governments, and countries. Thus, a long-run stock equilibrium obtains through the adjustment of asset prices, such as the interest rate for government fiscal positions or real exchange rates for the balance of payments

6) High Expenses on Medical Services

The combination of trade and monetary problems emanating from Europe and the USA will put severe strain on Governments in developing countries which are already battling with soaring medical costs, pressing demands to provide emergency assistance to the poorest sections of the population, and assistance to bail out faltering firms.

5) Adverse Effect on Public Health

nominal stickiness caused by wage rigidities, lack of complete foresight in the formation of expectations, cost of adjustment in investment by firms with physical capital being sector-specific in the short run, monetary and fiscal authorities following particular monetary and fiscal rules.

* Agricultural commodity market

1) Reduced demand

Reduced demand for commodities like corn, beef, wheat, timber and vegetable oil can alleviate pressure on forests, and extractive industries are less likely to invest in exploration or new projects during a recession. The precipitous decline in oil prices this year, for example, has already cut exploration budgets in Brazil by 20%.

2) Decrease in price

Food and Agriculture Organization said that food prices have dropped overall, including a 12% decline in the vegetable oil price index.

3) Loss of Export Business

“Eventually, there will be less commodity-led agricultural deforestation and timber-led forest degradation, as aggregate demand in export markets is reduced.Also the export business in vegetable sector also impacted drastically

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