Answer to Question #172638 in Microeconomics for Celine

Question

The widespread effects of the Covid-19 pandemic have been devastating and economically disruptive in South Africa. Covid-19 has defied what is deemed to be ‘normal’ in terms of conducting business. It is clear that the threat of Covid19 has affected the production of many commodities due to the stringent measures that have been put in place to contain the virus. The soft drink industry has almost come to a standstill. Most economic and social commentators feel that the Covid-19 pandemic effect on the economy is going to exacerbate widespread poverty, in an economy that is already highly unequal, as firms downsize, and people lose their source of income. Mention two (2) other factors that can cause each of the changes identified

Answer 1

Due to widespread business closures, especially in lower income populations, national economies are expected to contract, leading to a dramatic rise in unemployment and poverty rates.

Vulnerable populations such as low income earners in informal and precarious employment have been most affected by job losses and the resulting income loss.

The loss of jobs and income is likely to result in reduced ability to access healthcare and a nutritious diet.