The US economy (as well as other countries around the world) entered another recession almost 12 years after the Great Recession due to Covid-19. Please first read the following articles about the Covid-19 economy. Using the AD/AS Model, explain the shifts in the AD and AS. What are the causes of the Covid-19 recession?
In each part, please use just the AD/AS Model and their components in your answers (Remember that the AD components are C, I, G, (X-M) and the AS components are mainly resources, productivity, and technology). We will cover the real estate market crash and the financial sector later in the semester.
How Covid-19 Shocked Both Supply and Demand
Direct Link: https://review.chicagobooth.edu/economics/2020/article/how-covid-19-shocked-both-supply-and-demand
Decomposing Demand and Supply Shocks During Covid-19
Direct Link: https://voxeu.org/article/decomposing-demand-and-supply-shocks-during-covid-19