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Running Head: "Covid 19" 1

1) The COVID-19 pandemic has drastically impacted the U.S. economy. Measures like lockdowns and quarantines have frozen the economy with unprecedented speed, forcing over 38 million Americans to file for unemployment. This is the highest rate ever recorded and a sign that a recession is coming. 2) Reducing interest rates to zero or negative levels would provide relief to citizens struggling to pay loans during the pandemic. However, this would negatively impact central banks' balance sheets as they would receive no interest income. 3) With many unable to earn a living, some see the loss of income as a bigger problem than the virus itself. Most of the population lacks enough savings to survive prolonged lockdowns without

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63 views4 pages

Running Head: "Covid 19" 1

1) The COVID-19 pandemic has drastically impacted the U.S. economy. Measures like lockdowns and quarantines have frozen the economy with unprecedented speed, forcing over 38 million Americans to file for unemployment. This is the highest rate ever recorded and a sign that a recession is coming. 2) Reducing interest rates to zero or negative levels would provide relief to citizens struggling to pay loans during the pandemic. However, this would negatively impact central banks' balance sheets as they would receive no interest income. 3) With many unable to earn a living, some see the loss of income as a bigger problem than the virus itself. Most of the population lacks enough savings to survive prolonged lockdowns without

Uploaded by

Arti Dwivedi
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Running Head: “Covid 19” 1

Taranveer Kaur

University of Cumberlands

Dr. Craig Hovey

Managerial Economics

Date :30-05-2020
Running Head: “Covid 19” 2

1) As the coronavirus has ripped the biggest cities into America’s, having 140000 cases been

registered positive, it has impacted the U.S. economy drastically. The measures like

lockdown and quarantines which are being taken to deal with the pandemic have been

freezing the economy with unprecedented speed and force. According to the latest statistics

more than 3.8b million citizens of America have applied for unemployment benefits

("COVID-19 LATEST: Pharmacy bid for extra COVID-19 funding submitted to

government", 2020). This is the highest number ever recorded. The rate of unemployment is

more than what it was in the recession time of 2008. This is a big sign that the economy is

headed towards recession. The overall U.S. growth has slowdown the recent times pertaining

to the tensions between Washington and Beijing.

President Trump tweeted his disappointment on the 0.25 percent cut by the Federal Reserve,

as he expected it to be harder rate cuts. According to the economists, the growing situation

will result in higher cuts from the Federal Reserve to stimulate the economy.

The pandemic has affected the entire globe and the global economy. It has forced countries to

take loans. IMF has stated that they expect the growth in borrowing from the government will

rise substantially from 3.7 to 9.9 percent (Harvey, 2020).

2)If the rates are reduced to zero or negative it will of great relief to the citizens as they are

facing challenges in paying the loan amount. As the pandemic has hit the globes people have

lost their jobs and ways of earning their livelihood, this has resulted in an increase of

unemployment all across the globe. The companies are at standstill hence no trading or

business is happening. When people do not have money, it will be a blessing in disguise from

them if they do not have to pay any interest. But the negative impact will be on the central

banks as they will get no money, hence hitting their balance sheets.
Running Head: “Covid 19” 3

3)With no option to earn a livelihood, it seems to be a bigger disease than corona itself.

People are agitated as they feel they can maybe escape from corona but not from hunger.

Today people are facing challenges to survive. Most of the population does not have

sufficient money to survive the lockdown situation where there is no way of earning money.

Seeing the scenario, I totally agree that there is a bigger loss to the economy with the

lockdown situation than the corona itself. As managerial economists, I would have estimated

the

overall business loss being faced as a country. this will include imports and exports. the

bigger question for the people is survival. Hence it would be better to start off the economy

before it leads to stagnancy and recession.


Running Head: “Covid 19” 4

 References:

COVID-19 LATEST: Pharmacy bid for extra COVID-19 funding submitted to government.

(2020). The Pharmaceutical Journal. doi: 10.1211/pj.2020.20207843

Harvey, A. (2020). Covid-19: medical students and FY1 doctors to be given early registration

to help combat covid-19. BMJ, m1268. doi: 10.1136/bmj.m1268

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