Reference no: EM132583186 , Length: 1200 Words
Economics Assignment - Impact of COVID-19 on National Income
The current COVID-19 pandemic has changed our world in many ways. Since people are social distancing, they are spending less money on things such as eating at restaurants, buying clothing, and travelling. Some people are working from home, while many others have been laid off from their jobs. This will have a detrimental impact on the economy.
Though the current situation is extremely difficult for everyone, it does provide us with a good learning opportunity, because it ties in well with the topic of national income. Through this assignment, you will gain a better understanding of the concepts you have learned by applying them to a real-life scenario that we are experiencing firsthand.
Individually, you will research topics from this chapter and relate them to what is happening in Canada due to the current pandemic. You can choose how you will present your findings. It is probably easiest to write paragraph answers or create a PowerPoint presentation, but if you would like to use a different format, please consult with me in advance.
Assignment -
1. Watch the following video for an overview of the economics of COVID-19
- The Economics of the Coronavirus (YouTube)
Note: This is from an American perspective, not Canadian, so there are some slight differences in our case
2. Choose three topics from the following list:
a. Impact of the pandemic on the circular flow and equilibrium GDP in general
Explain the impact related to each of the four key actors
- Households (consumption, income)
- Financial institutions (savings, investment)
- Government (taxes, government spending)
- Foreign trade (imports, exports)
Determine what will happen to equilibrium GDP
b. Detailed look into the impact of the pandemic on consumption
Explain the impact using the factors that influence consumption
- Disposable income
- Interest rates
- Wealth
- Expectations
- Psychological
- Distribution of income
- Prices
- Demographic factors
c. Changes to the consumption schedule in general
- How are average/marginal propensity to save/consume affected?
- What will be the impact of these changes?
d. Detailed look into the impact of the pandemic on business investment
Explain the impact using the factors that influence investment
- Interest rate
- Government policy and taxes (related to business)
- Expectations
- Gross domestic product
e. Detailed look into the impact of the pandemic on foreign trade
How has the demand/supply of Canadian exports changed?
- Which industries are affected?
How has the demand/supply of foreign goods changed?
f. Explain changes to the aggregate demand and aggregate supply curves
How are these curves shifting? (left or right)
- Use evidence to show why the curves are shifting in this manner
What will be the end result of these shifts?
- How is equilibrium GDP affected?
g. Explore the relevance of the Paradox of Thrift
- Are people trying to save right now? Are they able to save?
- Is the Paradox of Thrift relevant to the current situation?
h. Investigate the connection between equilibrium GDP and full -employment GDP
Is there currently an inflationary gap or recessionary gap?
- How did this gap arise?
i. Use the current economic situation to argue against Say's Law.
Do you believe Say's Law is applicable to the current situation?
- Explain why or why not using evidence to support your argument
j. Discuss the role of government in the current economic situation.
What is the Canadian government doing to help the economy?
- What is being done to support households and businesses?
- Is the government doing enough or should more be done? If you argue more should be done, what in particular?
k. Explain the impact on the business cycle.
Is the economy going through a contraction or an expansion?
- What is causing this change?
Is the economy headed towards a recession or depression?
- Explain which and evidence to support it
3. Use news articles, charts, maps, statistics, etc. to discuss each topic in depth relating to the current economic situation. You must use at least one news article for each question. Additional sources can be of any type.
Sources used should be credible (not Wikipedia, personal blogs, etc.) and you must include a bibliography using the citation method of your choice.
The level of detail for each answer should be equivalent to a paragraph of approximately 300 words.
Note: Check out the 'selected websites' section at the end of the chapter for some websites you could possibly use to start your research.