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    IMT Covid19 SS

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    Sandeep Surendran
    OPEC reduced oil production to stabilize prices amid low demand during the COVID-19 pandemic. While this aims to stabilize prices in the long run, OPEC's influence on markets is criticized. India would face cyclical unemployment from pandemic-induced demand reductions. The recession was V-shaped as governments worked to avoid prolonged damage. In India, aggregate demand was more impacted initially due to lockdowns, though aggregate supply remains affected now. Fiscal policies like tax cuts and employment programs as well as monetary policies like interest rate cuts are recommended to boost the economy.

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    IMT Covid19 SS

    Uploaded by

    Sandeep Surendran
    702 views3 pages
    OPEC reduced oil production to stabilize prices amid low demand during the COVID-19 pandemic. While this aims to stabilize prices in the long run, OPEC's influence on markets is criticized. India would face cyclical unemployment from pandemic-induced demand reductions. The recession was V-shaped as governments worked to avoid prolonged damage. In India, aggregate demand was more impacted initially due to lockdowns, though aggregate supply remains affected now. Fiscal policies like tax cuts and employment programs as well as monetary policies like interest rate cuts are recommended to boost the economy.

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    Covid 19 case study

    Original Title

    IMT_Covid19_SS

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    OPEC reduced oil production to stabilize prices amid low demand during the COVID-19 pandemic. While this aims to stabilize prices in the long run, OPEC's influence on markets is criticized. India would face cyclical unemployment from pandemic-induced demand reductions. The recession was V-shaped as governments worked to avoid prolonged damage. In India, aggregate demand was more impacted initially due to lockdowns, though aggregate supply remains affected now. Fiscal policies like tax cuts and employment programs as well as monetary policies like interest rate cuts are recommended to boost the economy.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    702 views3 pages

    IMT Covid19 SS

    Uploaded by

    Sandeep Surendran
    OPEC reduced oil production to stabilize prices amid low demand during the COVID-19 pandemic. While this aims to stabilize prices in the long run, OPEC's influence on markets is criticized. India would face cyclical unemployment from pandemic-induced demand reductions. The recession was V-shaped as governments worked to avoid prolonged damage. In India, aggregate demand was more impacted initially due to lockdowns, though aggregate supply remains affected now. Fiscal policies like tax cuts and employment programs as well as monetary policies like interest rate cuts are recommended to boost the economy.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
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    The document discusses OPEC reducing oil production to stabilize prices amid the pandemic and analyzes profit maximization for a publishing company. It also covers types of unemployment India may face during COVID-19 and fiscal and monetary policy recommendations.

    A company can maximize profits by producing at the level where marginal revenue equals marginal cost. For the publishing company, this is 92 articles with a revenue of €375 per article.

    India may face cyclical unemployment due to the pandemic, as demand decreases and companies lay off workers to cut costs. COVID-19 has also caused a V-shaped recession in India, with a steep downturn followed by a quick recovery with minimal long-term damage thanks to government and private sector efforts.

    Name SS

    Question 1

    1A

    1. The ongoing uncertainties and fragility caused by the Corona virus pandemic led the OPEC
    to reduce oil production.

    2. Advantages: OPEC aims to stabilize the oil production and its price in the world market.

    Disadvantages: OPECs influence on the market is widely criticized

    1B

    1. Due to multiple lockdowns, the demand for oil reduced drastically. Further, Traders
    worried about the US run out of oil storage space. These fears added to doubts that OPEC’s
    agreement to cut down the oil production.

    2. Outcome - To Stabilize oil prices amid the coronavirus pandemic and reduce over-supply.

    3.

    1C: OPEC operates in Oligopoly market structure.

    Key features:

    1. Product branding
    2. Entry barriers
    3. Interdependence decision making
    4. Non-price competition

    Question 2
    2A:

    1. 92 Articles at profit maximization level


    2. €2500 was the total profit
    3. Profit maximization is a point where marginal revenue (MR) equal to marginal cost
    (MC). If the company publishes more than 92 articles at a revenue of €375 per article,
    the marginal cost will be more than the marginal revenue.

    2B

    1. Fire 6 Journalists (MR will be equal to MC at 54 articles and 4 journalists at a


    revenue of €250 per article)
    2. New total profit is €1500
    3. If I retain the balance 6 journalists and publish articles at a revenue of €250 per
    article, my MC would be more than MR.

    Question 3

    3A: Country like India would face Cyclical unemployment.

    This situation arises when the demand for goods and services reduce in a country are forced
    to cut down the labour cost/lay off to control costs.

    3B: Covid-19 pandemic caused a V-Shaped recession. V-Shaped recession is where there is a
    steep downfall in the economy of the country and it bounces back with minimal damages. Both
    government and private sectors work together and take necessary steps to avoid stagnancy in
    depression.

    3C: In India, there is a high impact on Aggregate demand than on Aggregate supply. During
    the first wave both the aggregate demand and supply was very low due to multiple lockdowns
    and decrease in the purchasing power of people due to uncertainties. Comparatively in the
    second wave, though there is an uncertainty in spending power, employment, and stocking of
    goods (both industrial and household), the aggregate supply is still high or less impacted.

    3D: In the given situation, where the aggregate supply is more than the aggregate demand, the
    AD will shift left and the GDP will be less than the potential. This is due to the reduction in
    purchasing pattern (demand) with the people due to uncertainties.

    Question 4

    4A: The Government of India should adopt FISCAL Policy. To boost the economy, government
    should cut the income tax rates, so that people’s disposable income raises, which will enable
    them to spend more. The below measures are recommended by economists,

    1. Public distribution system should be improved (Ration shop)


    2. Guarantee employment opportunities in both urban and rural areas
    3. Tax relief for affected sectors
    4. Improve public investments in infrastructure
    5. Improve and invest in healthcare ecosystem

    4B: The Reserve Bank of India should adopt Monetary Policy. The below measures are
    recommended

    1. Reduction in rate of interest and exchange rates


    2. Provide working capital support for small businesses
    3. Cash reserve ratio to be brought down

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