Question.2924 - Think about some industry or type of firm that you have knowledge about and explain how that industry was affected by COVID-19. Then explain how this impact could demonstrated in our AD/AS model. For simplicity, assume that Real GDP (output) was equal to Potential GDP (LRAS) before the pandemic. [4 points] Did AD or AS shift? In what direction? [4 points] How was the equilibrium impacted? Did Real GDP increase or decrease? What happened to the price level? [4 points] How does the model predict unemployment to change? [4 points] As a part of your discussion, include a graph of the AD/AS model that shows the changes you identified and illustrates a new equilibrium as a result of the change.
Answer Below:
The xxxxxx pandemic xxx an xxxxxx on xxxxxxxx industries xxx airline xxxxxxxx was xxx sector xxxx suffered xxx most xxxxxx the xxxxxxxx the xxxxxxx sector xxx a xxxxxxxxxx increase xx both xxxxxxxxx volume xxx revenue xxxxxx et xx On xxx other xxxx the xxxxxxxx breakout xxxxxxx passenger xxxxxx caused xxxxxxx aircraft xxxxxxxxxxxxx and xxxxxx travel xxxxxxxxxxxx nbsp xxxx The xxxxxxxxx demand xx and xxxxxx AS xxxxx towards xxx left xxxxx consumer xxxxxxxx on xxxxxxxxxxxxx goods xxx services xxx the xxxxxx chain xxxxxxxxx in xxx intersection xx new xx and xx results xx a xxxxx GDP xxxxx with x price xxxx In xxxxxx the xxxxxxxxxxxx of xxx new xx and xx results xx a xxxxx rise xx the xxxxxx decreases xxx demand xxx the xxxxxxxx increases xxx as xxx demand xxxxx the xxxxx level xxxxx From xxx two xxxxxxx we xxx observe xxxx the xxxx GDP xx less xxxx the xxxxxxxxx GDP xxxx leading xx a xxxxxx unemployment xxxxx as xxx industry xxxxxxx its xxxxxxxxx in xxxxxxxx to xxxxx production xxxxx References xxxxxx J xxxxxxxx V xxxxx S xxx Tufft x March xxxx Taking xxxxx of xxx Pandemic xxxxx s xxxxxx on xxxxxx Aviation xxxxxxxx amp xxxxxxx https xxx mckinsey xxx industries xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx our-insights xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx in xxxx Lesson xxxxxxx Changes xx the xxxxx model xx the xxxxx run xxxx Academy xxxxx www xxxxxxxxxxx org xxxxxxxxxxxxxxxxxxxxxxxx macroeconomics xxxxxxxxxxxxxxxxxxxxxxxxxxxxx macro-changes-in-the-ad-as-model-in-the-short-run x lesson-summary-changes-in-the-ad-as-model-in-the-short-runMore Articles From Economics
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