From a microeconomics angle, how do you think the COVID-19 is going to affect individuals and businesses in 2020?

Hmm I got D for economics but from my own reasoning

Demand for goods and services decreases

• people choose to stay in instead of go out, reduction in group gatherings

• worries bout recession causes people to go into a “saving” mentality

• anything Related to the travel industry gonna have HUGE loss in demand (eg, food, travel tech companies, hotel, flights, tours etc)

Inefficient workforce (lower output)

• Govt are enforcing work from home/ halt of businesses to continue, and ofc lots of people are getting quarantined

• manufacturing, retail, fnb sectors gets affected

Result in loss of revenue for many companies, so they need to think of measures to cut cost

• lay offs

• less pay (eg some companies make workers take 3 months no pay leave)

Which will result in people spending even less, and the cycle continues...​​​

I saw this really good infographic from DrWealth.

You can reference it here. Basically most of the time, it starts like a domino falling, where one sector and vertical falls and creates a big enough impact to a broader economy.

If flows something like this:

1. Business lose money (due to COVID-19)

2. They begin to look for ways to cut costs

3. Ultimately one of those methods is to cut labour (jobs)

4. People thus become unemployed and have less to spend (discretionary spending drops)

5. Rinse and repeat from step 1

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