The detailed instructions for the essay are as follows:
As we are all aware, the current coronavirus crisis has had a heavy toll on Canadian economy. EI (employment insurance) applications last week rose 4000% compared with the previous week to almost 1 million applications and up to three million Canadians might lose their jobs soon. Please write an essay on the Cause and Effects of the 2020 Recession, and What Must be Done to Return Economy to Macroeconomic Equilibrium.
Here are some of the things that might help you in structuring the essay. Please do not write your essay in a Q and A format. These questions below are supposed to help you write your essay. Use data and graph when necessary. Provide references for quotes.
Many predict the Canadian economy is headed for a recession in 2020. Can you provide some leading indicators to support that prediction? (Please find out what leading indicators are and how they forecast an incoming recession.)
Analyze the economy from the perspective of Aggregate demand and Aggregate supply, Answer why the Canadian economy is headed for a recession. (Refer to Chapter 10 on AD and AS and the factors that can shift them.)
Analyze the 2020 recession with the last two recessions we had in this century, the 2001 recession and the 2008 recession (research what caused those two recessions). How would this recession compare to the last two in terms of severity, duration and recovery track (quick recovery, slow recovery, V shape, U shape, L shape, etc.)
The last two recessions all hit the US harder than Canada. What is your prediction for Canada this time?
What should be done to return the economy to macroeconomic equilibrium? In monetary policy and fiscal policy? (chapter 13 and 14) What have the Government of Canada and the Bank of Canada done so far? Do you think it is enough? Why or why not? (chapter 11 Expenditure multiplier)
In providing stimulus to the economy, how should the Government of Canada weigh fiscal stimulus with rising debt/GDP ratio? How should the Bank of Canada still maintain its inflation target while increasing money supply? (chapter 12, inflation and deflation)
The current crisis has disrupted the international trade we are familiar with. Many countries have enforced limitation on export of key commodities, such as medical supplies and food. What is your criticism of the comparative advantage theory we learned in chapter 15?
A crisis like this will affect a countrys international position dramatically. What will happen to Canadas balance of payments? What will happen to the exchange rate of the Canadian dollar? Why? (chapter 9, exchange rates and balance of payments)