Answer to Question #239375 in Macroeconomics for ROSE

Question

‘’Given the rapid spread of COVID-19, countries across the World have adopted several
public health measures intended to prevent its spread, including social distancing (Fong
et al. (2020)).1 As part of social distancing, businesses, schools, community centers, and
nongovernmental organization (NGOs) have been required to close down, mass
gatherings have been prohibited, and lockdown measures have been imposed in many
countries, allowing travel only for essential needs.2 The goal is that through social
distancing, countries will be able to “flatten the curve”, i.e., reduce the number of new
cases related to COVID-19 from one day to the next in order to halt exponential growth
and hence reduce pressure on medical services (John Hopkins University, 2020a). The
spread of COVID-19 is expected to result in a considerable slowdown of economic
activities. According to an early forecast of the International Monetary Fund (2020a), the
global economy would contract by about 3 percent in 2020.
What is the uncertainty of the economy given the current situation?

Answer 1

The COVID-19 pandemic has brought quite a number of uncertainties and unpredictable impacts on the economics of all countries globally. these uncertainties are; The impact of the pandemic and the response of the policies instituted, the rate at which the economy will recover as the pandemic recedes, the extent to which the shifts induced by the pandemic in consumer spending patterns will last, and the impact of the pandemic on the survival of business. All these uncertainties will always be there as long the fight for the pandemic has not been won. They will surely bring more uncertainties as the new variants of the virus emerge on the economies.