Project Covid-19

The Global Shutdown

Changes in demand and supply of oil pre and post decision. Consequence on
price.
 Macroeconomic Model#1

AD – AS used in determining the

changes in

• Output
• Employment
• Inflation

AD IS THE TOTAL AGG. QUANTITY

OR OUTPUT THAT IS WILLINGLY
BOUGHT AT A GIVEN LEVEL OF
PRICES

AS IS THE TOTAL SUPPLY OF

GOODS AND SERVICES PRODUCED
IN AN ECONOMY
AGGREGATE
DEMAND AND
AGGREGATE
SUPPLY - taken
together
Recession

Expansion

Expansionary or Contractionary Policy

 Monetary Policy
The actions undertaken by a nation's central
bank to control money supply and achieve
sustainable economic growth, keep
unemployment low, and maintain foreign
exchange (forex) and inflation rates in a
predictable range.

Monetary policy can be broadly classified as

either expansionary or contractionary.

RBI Tools: Open market operations, CRRs,

Direct lending to banks, Bank reserve
requirements, Unconventional emergency
lending programs, QE, and managing market
expectations.
 Fiscal Policy
John Maynard Keynes argued that economic
recessions are due to a deficiency in the
consumption spending and business investment
components of aggregate demand.

Keynes believed that governments could

stabilize the business cycle and regulate
economic output by adjusting spending and tax
policies to make up for the shortfalls of the
private sector.
In Keynesian economics, aggregate demand or
spending is what drives the performanagrowth
of the economy.

Fiscal policy can be EXPANSIONARY FISCAL

& CONTRACTIONARY FISCAL
What is expansionary monetary policy?
Deficits or surplus? https://www.worldatlas.com/articles/countries-with-the-to
p-budget-surplus.html

• REMEMBER TO STABILIZE THE

https://data.oecd.org/gga/general-government-deficit.ht
ECONOMY, THE GOVERNMENT m
SHOULD RUN LARGE BUDGET
DEFICITS DURING ECONOMIC
DOWNTURNS AND https://datalab.usaspending.gov/americas-finance-g
uide/deficit/trends/
• THE GOVERNMENT SHOULD
RUN BUDGET SURPLUS DURING
AN ECONOMIC BOOM OR WHEN https://www.statista.com/statistics/271318/budget-b
ECONOMY IS GROWING. alance-in-india-in-relation-to-gross-domestic-produc
t-gdp/