Q. COVID-19 all around the world has restricted the economic activity. To stop the spread of the virus Pakistan like many other countries adopted the policy of smart lockdown. Shutting down of the industry has created an adverse supply shock in the economy. While the slowdown in business and economic activities the country is in the recessionary phase of the business cycle as the GDP growth for the FY 2020-21 is expected to be -0.2 accompanied by high unemployment and poverty rate. 1.Using AD-AS model reflect how it might have affected the economy. Explain the impact on price and output. 2.If the policymakers decide to take no action, reflect the impact it is going to create using AD-AS model in the long run. Also, explain the impact on price and output. 3.If the central back opts for increasing money supply, reflect the adjustments using AD-AS in the SR and LR and explain the impact on price and output. (DRAW SEPERATE GRAPH FOR EACH PART)
Q. COVID-19 all around the world has restricted the economic activity. To stop the spread of the virus Pakistan like many other countries adopted the policy of smart lockdown. Shutting down of the industry has created an adverse supply shock in the economy. While the slowdown in business and economic activities the country is in the recessionary phase of the business cycle as the
1.Using AD-AS model reflect how it might have affected the economy. Explain the impact on
2.If the policymakers decide to take no action, reflect the impact it is going to create using AD-AS model in the long run. Also, explain the impact on price and output.
3.If the central back opts for increasing money supply, reflect the adjustments using AD-AS in the SR and LR and explain the impact on price and output.
(DRAW SEPERATE GRAPH FOR EACH PART)
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