Essay on the Corona Virus and Economic Stability

Corona virus has made it vital for all human races to sustain with basic needs of life required for physical survival such as food, water, shelter, oxygen and sleep. The pandemic has caused the satisfaction of these basic survival needs difficult to achieve as it has now dominated all of their interests and concerns because a person who has fallen a prey to the virus will definitely need not to worry about luxuries of life rather than surviving for his own life over other social work. Other than that, the prevailing lockdown throughout many countries in the world have even made the capacities to meet these basic needs dependent of adequate income level as high housing costs along with low rental rates had made it difficult for people and has rather transitioned into making people homeless. Similarly, food being an obvious physical necessity has also been intertwined with other social and cultural aspects of lives to go consistent with the economy. This makes the cost of living hard for a middle man that describes how much he has to pay for his basic necessities like food, clothes, shelter and everything including in his basic everyday other need items. This scale actually measures the expenses of a person’s current location over a period of time and in this pandemic situation. The cost of living has elevated much higher as it is that amount that the individuals need to sustain a simple standard of life which makes him afford the expenses of the basic necessities and the cost of living is directly linked to wages and it is evident that these days, is has become really hard for companies to provide its employees with basic wages and salaries.

This ultimately leads to the phenomenon of aggregated demand and aggregated supply where the former one defines the net amount at which firms become willing to sell their goods and services whereas, the later one is defined as the possible worth at which all those goods and services can actually be purchased by the customers and due to the corona-virus situation, customers are divergent towards buying goods that they get on best possible low prices for not willing to pay higher amounts. This elevates the need of people’s savings and their investments especially during this global pandemic as they can analyze through this how they can assess their net investments and what part of income they hold in hand which has not been already consumed or spent on avoidable goods and services. Savings are the difference of total income and total consumption expenditures and to balance these during these days has become really difficult.

This is how the financial system of not just high profiled companies but also the simple household works. The only difference is that in professional organizations, companies can progress with funds rather than using their own consumptions whereas, hardly any company is willing to provide loans to their employees in these hard times hence people have to run their financial systems accordingly. This system is contrary to the system of open economy where economies of the world interact freely.

The most crucial effect of corona virus is unemployment that has lead individuals to seek jobs who were even already employed and now they are unable to find new jobs while they possess all the skills and are readily available as they simple want to earn for their basic needs of life. Although, the present situation has stopped all systemic rules of employment but apart from the global pandemic situation. This can be minimized through monetary policies, minimum wages, flexible labor markets and other fiscal policies. But what governments can do right now is to make use of the transfer payments which includes the benefits the local state or even federal government plans on giving to its unemployed residents for them to sustain their lives. This also includes medical care and social security.