The Coronavirus (COVID-19) pandemic has had a devastating impact on economic activity throughout the world. COVID-19 has led to increased unemployment, reduced confidence, extreme volatility in stock markets and shrinking demand and supply globally. The efforts to contain the virus have included the enforcement of social distancing and the reduction of cross-border travel. The US government and the Federal Reserve have taken several steps to address the impact of the virus on households, businesses and other vulnerable sectors of the economy. Depending on the duration and overall severity of this crisis, it is quite possible that this could lead to another recession. Given your understanding of macroeconomic concepts and issues, write a one (1) page essay that answers the following prompts:
Outline two (2) economic impacts of the Coronavirus on the USA economy. (5 points) Based on your answer to the previous prompt, describe how this will affect aggregate demand and supply in the short-run. (5 points) Outline two (2) policy responses in the USA to the pandemic. Please include a fiscal policy response and a monetary policy response. Discuss how your selected policies will help during this outbreak. (5 points) In your opinion, do you believe the pandemic will cause a recession or slow economic growth? (5 points)
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