Background

In 2020, a novel virus spread worldwide with devastating effects on individual and community health and well-being. Part of the response was rooted in mandates for individuals to stay at home, work from home, and generally reduce social contact. These measures affected firms taking place in a social environment. For businesses focusing on in-person or non-digital activities, such as retail, sales fell. Dining out, concert-going, and travel were damaged. GDP and employment fell rapidly. The United States government acted swiftly to enact counter-cyclical fiscal and monetary policy.

Referring to past economic downturns, such as the Great Recession of 2008-2009, plan to address the following issues that are important for junior staff members with limited training in macroeconomic issues or policy to understand:

• Background and context of the recession beginning in 2020, addressing anticipated effects on:
  • Components of Aggregate Demand
  • Multiplier Effects of Changes in Expenditure
• Describe appropriate policy responses, including:
  • Four Tools of Monetary Policy
  • The Dual Mandate of the Federal Reserve