Question

1. What phase of Business Cycle we are going through since March? What are the impacts of COVID-19 on macroeconomic factors such as: economic growth rate, Unemployment rate, interest rate, and the Inflation rate. What is the future projection on US and the Global Financial Market?

Answer 1

1. According to me, currently the world is going through recession cycle. It may turn into depression if covid-19 stays for longer time.
2. Covid-19 will directly affect growth rate, umemployment rate as there will be no work. So growth will be hampered. and unemployment will rise.
3. To counter that, governments will decrease the interest rate, so interest rates will go down.
4. Effect on inflation will be mixed, people will not demand products which are not essential, thus their prices will go down, on the other hand, as essentials will be demanded but supply will be less because of less production, price of those products will go up. As a result inflation may go up.
5. People will move away from share markets for some time. Markets will go down. But, people will invest in bonds and Gold. They will attract investors and as a result they will go up.