3-4 pages economic essay with graph

profileNancy 00001
FianlExamcc.pdf

Coquitlam College

ECON 202 – Final Exams (50 points)

Spring 2020

Instructor: Kojo Laryea

QUESTION:

The COVID-19 outbreak has struck Canada as well as every other part of the world since it was first

reported in December 2019 and the disease continues to cause so much havoc. Although this is a

public health issue, it has managed to hit the global economy negatively in different ways. The stock

market continues to plummet everyday, with people losing billions of their wealth; most businesses

have come to a halt and workers have been asked to stay home in order to reduce the spread of the

deadly virus; the virus is also causing people to fall sick and not being able to work. This pandemic

has also caused some small-scale businesses to lay-off workers partly because they are not able to pay

them wages and salaries. The airline industry has come to a standstill because various countries have

closed their borders and are limiting traveling. Due to this, airline companies like WestJet are expecting

to lay-off between 20%-50% of their workers if the situation persists in the coming days. Most

sporting events and leagues around the world have been suspended. Companies like Nike and Apple

have closed all stores due to this pandemic. Also, Crude oil prices keep plunging over these few

months.

Throughout the semester, we have discussed various economic variables and how they are related. We

have also discussed the difference between the Classical and the Keynesian Economists’ view about

how the economy reacts to shocks in the market. We have also discussed how the government and

the central bank can use Fiscal Policies and Monetary Policies respectively to help solve a recession in

an economy.

With reference to everything we discussed in class throughout the semester, discuss how the COVID-

19 pandemic has affected or is affecting the Canadian economy and how the government of Canada

together with the Bank of Canada are trying to mitigate the problem.

Guideline: Your essay should include, but not limited to the information in this guideline

1. Make sure to discuss how this pandemic will affect Canada’s GDP and growth rate (makes will

be awarded for explanation and examples.) (5 marks)

2. Make sure to discuss how the pandemic will affect Canada’s interest rates. (3 marks)

3. Make sure to discuss how the pandemic will have an effect on Canada’s inflation and also

discuss what the Bank of Canada should do/are doing to maintain their core values with respect

to inflation. (5 marks)

4. Also, make sure to explain how the pandemic will have an effect on unemployment. (3 marks)

5. Based on our discussions in class, how do you think this pandemic will also have an effect on

the nominal exchange rates? (2 mark)

6. Explain the results that can be predicted from Classical Economists’ view with respect to this

economic shock assuming the shock affects only aggregate demand (make sure to explain what

will happen to both real and nominal variable) (6 marks)

7. Explain the results that can be predicted from Kaynesian Economists’ view with respect to this

economic shock. Assuming the shock affects both the AD and SRAS but not the LRAS, explain

the short run equilibrium, and how the economy will transition back to its long run equilibrium

using the Supply-Side Adjustment Mechanism. (6 marks)

8. Considering your answer to question 7., what are the Government of Canada and Bank of

Canada doing to mitigate this situation. Use the AD-AS model to explain how they can solve

or reduce the economic effects of this pandemic. (10 marks)

9. Clarity and overall structure of the essay. (10 marks)

INSTRUCTIONS:

1. The deadline for this essay is Wednesday, 8th April, and it will not be extended. If you do not

submit by the deadline, your essay will not be graded and that will affect your final grade. No

excuses

2. You are required to upload your essay on C4 but not my email. If you send it via email, it will

not be graded.

3. If I realise that you submit the same essay with another person, it will have an effect on your

final score, so make sure you do this independently

4. Make sure to provide references of any article that you cite in your essay.

5. Try to limit to three pages (Spacing at 1.5 lines, Use Time New Roman 12pt font size).