Answer to Question #236694 in Macroeconomics for Zama

Question

Covide 19 has caused an economic shock around the globe. Most important economic indicators are widely affected by the shock.

🔹️Discuss the economic effect of covid-19 on employment, output and inflation in South Africa.

🔹️Given the nature and effect of covid-19 employment, output and inflation, how should policy makers respond to covid-19.

Answer 1

From the time Covid-19 was reported in South Africa, there were so many jobs that were closed. That means the income that was earned by south African employees decreased by a particular percentage. The employment rate is low, and that affects the achievement of the potential output for the South Africa economy. To achieve full employment is equivalent to performing the potential level of output. Therefore, Covid-19 has caused low levels of employment. Inflation has caused the raising of price levels hence affecting the output negatively. Policymakers should summarize all significant economic responses the government of South Africa is taking to ensure Covid-19 does not affect humans and the economy.