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Due to the Corona virus, both aggregate demand and aggregate supply have been declining recently for...

Due to the Corona virus, both aggregate demand and aggregate supply have been declining recently for the US economy

True or False?

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Answer #1

It is true that due to COrnonavirus COVID-19 pandemic, both aggregate demand and aggregate supply has been declining recently for the US economy. This is because there is a widespread lockdown.

The manufacturing units are on standby. People have been asked to stay home and stay safe. As a result of which the market is closed. The domestic borders across different regions and international borders are closed until further notice. There is no consumption activity beyond essential goods. There is no production and hence, there is no investment.

The service sector except for medical & law & order services are at halt.

Hence, aggregate demand and aggregate supply are declining.

Thus, the statement is true.

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