Question

Based on your learning in Microeconomics, explain how COVID-19 has a favourable and an adverse impact in today’s situation, with aids of diagram “Market Forces of Supply and Demand” and “Elasticity”

Answer 1

Covid19 has had favourable impact like increased insurance penetration, environmental balance and Ecosystem preservation due to lockdowns, higher awareness of health and safety prevention, low cost business setups, virtual collaboration which saves time.

However, some downsides like increased fatalities and business disruption creates higher government spending and fiscal deficit, increased unemployment, lower consumption and spending, decrease in national income, and thus reduced exports all which triggers recession.

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