Analyse the effects of quarantine on GDP, employment and the unemployment rate…. 1 answer below »

Part 1 (20 marks)

GDP and unemployment

a) Analyse the effects of quarantine on GDP, employment and the unemployment rate. Which

industries are likely to be most affected and which industries are likely to be least affected

by quarantine measures?

b) Choose any country that introduced quarantine as an example. What was its GDP growth

rate in 2018, 2019? (Indicate the source of information.) Is this country likely to be in

recession this year? Refer to two definitions of recession.

c) Are your answers consistent with (general) Okun’s law?

Part 2 (20 marks)


a) What do you think would happen to inflation in your chosen country in the coming year?


Demand components: Consumption

b) What factors usually determine individual consumption? In light of these factors analyse

how the situation with the COVID-19 pandemic is likely to affect aggregate consumption.

Use the theory studied in the course in your answer. You may want to provide some

examples for your chosen country.

Part 3 (20 marks)

Demand components: Investment and net exports

Analyse the effects of the COVID-19 pandemic on investment and trade (exports and imports, in

particular). Refer to the theories studied in the course. Provide some examples from your chosen

country. Do you think investment and trade will also be affected after the pandemic is over?



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