POL 100 I Exam #1-Covid-19 Pandemic and Its Impacts on the Economy

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POL 100 I Exam #1-Covid-19 Pandemic and Its Impacts on the Economy

-From “Pandemic 2020” (30 points)

Q1. Based on the video “Covid 19- how bad will it be for the economy,” the key impact on global economics is a decrease in retailing and production. First, the retailing decreased because buyers no longer have a disposable income to acquire products. This situation affected the global supply and created a ripple effect on the production sector. Consequently, manufacturers had to shut down their businesses due to a lack of sales and increased overheads. The economy suffered a rapid fall because when the pandemic was discovered, many countries closed their boundaries and enforced lockdowns that limited citizens' ability to carry on with their daily activists.  The stock market's initial effect was a decline in demand for the stock and an increase in holding of stock dividends. In this case, people did not demand shares as they usually do, and also, companies restructured their dividend sharing mechanism. Some companies preferred to delay paying dividends and promised investors to plough back the savings. The entertainment, hospitality, and travel industry were highly affected. First, entertainment joints such as cinemas and casinos had to be shut down to limited group transmission of Covid-19. Also, the hospitality industry, such as hostels we closed to lower grouping of people. A similar intensity of effect was experienced in the travel and transport industry since airplanes could no longer move from one country to another.

Q2. The effect of the pandemic cuts across all continents almost equally. According to a report published by Asian and the Pacific (2020), the Asia Pacific experienced a high number of infections a few weeks after the first case was reported in their territory. This was a form of a quick local transmission considering air travel had been halted. Latin America is also having a highly hit by the pandemic. One of the main characteristics of the effects is the massive loss of jobs in Latin American countries as well as failing businesses.  For example, current Brazil has a high number of positive cases at 1,448,753 people, followed by Peru at 288, 477 infection. However, other than...