Lecture Friday 24 Sep (Week 10, lecture 3) COVID and the AD-AS model

Question 1

In what ways would Covid-19 affect the economy?

Answer 1

This leads to a decrease in consumption, decrease in tourist arrivals, a decrease in overseas workers arriving in NZ, a decrease in the labour force and some small business shutting down, some permanently ceased operations. This will lead to a decrease in the LRAS curve and a decrease in the SRAS