Assignment no 4: NOTE: PEARL Essay Assignment

Submitted by: Danyal jan

ID:cu-3089-2022
Submitted to: Sir Abdul Majid
Subject: Microeconomics
Department: BS Accounting and finance
https://www.dawn.com/news/1548669/new-playbook-foreconomics HTTPs:
//www.dawn.com/news/1546321/covid-19-stress.It
It has been noticed that there's tons of problem we face now. This pandemic situation disturbs
the entire world people are scared of having difficulty in touch with other, travelling offices,
public transport everything is locked. In the wake of the five-month grace period granted to
Pakistan by the Financial Action Task Force and therefore the flexibility shown by the
international fund (IMF), experts see the scope for economic diplomacy expanding. The impact
of lower rate of growth is predicted. Data is lacking to access the impact of uncertainty about
growth lowerCOVID'19 with higher growth lower dispersion then the opposite. Most
economists foresee negative GDP growth within the fourth quarter of the present financial
year, a trend which will persist even after the health threat neutralizes. They detested the
tendency to propel routine issues to the forefront during this do-or-die moment. "The deadly
virus is staring us within the face. We can't afford to lose focus. If we survive this scourge,
there'll be many times to settle old scores," noted a number one Punjab-based economist while
hinting at the sugar and wheat scandals. We need to keep things in perspective during this
period. The main cause of despair arises from the feeling of uncertainty, and if it creates
anything in the world, it is the perception of the unknown. Everything we know about the
general rhythm of life has changed and things change as we speak. Schools are closed, instead
of financial closures, restaurants, large laboratories, theaters, parks, gyms and other
communications are unavailable, hospitals are changing care facilities, travel has come to a
meeting and public transportation has been approved. Life as we know it, is no more. COVID'19
plays negative role in supply adamant COVID'19 coronavirus is spreading throughout the world.
Besides its impact on public health, this coronavirus outbreak is probably going to possess
significant economic consequences. The consensus is that the virus will cause a negative supply
shock to the planet economy, by forcing factories to pack up and disrupting global supply chains
(OECD2020). Unreality, productivity growth is a minimum of partially driven by firms'
investment. In turn, investment decisions depend on law of demand - when demand is strong,
the return from investment tends to be high; weak aggregate demand, conversely, depresses
firms' incentives to take a position. This effect gives rise to a positive relationship between
productivity growth and aggregate demand, captured. The equilibrium is determined by the
intersection of two upward-sloping curves. This signals the presence of amplification effects.
the general public health emergency that's brewing round the country is one thing. The
lockdowns and therefore the enormous cost that they're going to exact is another. Of course,
there's no trade-off here, within the sense that we aren't choosing between protecting lives or
livelihoods. the 2 are linked and an epidemic is harder to regulate once it's crossed a particular
threshold. Whatever their cost, the lockdowns are necessary to make sure that this public
health emergency doesn't become an outright catastrophe. In the stimulus package Rs50bn has
been included specifically for this purpose, which is expenditure on top of what the provincial
governments are already spending for the fight. Then comes the value of income support and
ration packs that need to be provided to the vulnerable sections, from the poor to the daily
wagers and therefore the unemployed. Even assuming Rs500 per day because the basic
requirement for a household of seven, with 10million deserving households, this suggests
Rs5bn per day, or Rs150bn per month. the COVID-19 crisis results in a large-scale fiscal
expansion, which affects aggregate savings. Excess savings were seen as a crucial think about
driving down the equilibrium real rate of interest within the past decades. The lockdown of
economies creates conditions during which private sector demand may fall unboundedly.
Government support measures attempt to prevent this. If the increased supply of state bonds
persists, there'll be an upward effect on the equilibrium rate of interest, to the extent that the
bonds are safe and thereby provide a vehicle for the private sector to carry its increased
savings. However, the crisis also features a downward effect on thee quilibriumrate if potential
growth falls and risk premier remain elevated thanks to increased risk aversion. Consistent with
article Dr Ali Cheema said in his comment, "The government should track prices and inventory
build-ups of necessities at an administrative body level (city, tehsil) to assess market disruptions
and map the supply of grain and other necessities which will be made available in places
witnessing shortages." Dr Ishtar Husain said he was currently that specialize in administrative
reforms and excused himself from offering comments on the evolving situation.

Published in Dawn, the Business and Finance Weekly, April 13th, 2020.