Covid-19 pandemic has impacted almost all countries in the world. According to Bank Negara Malaysia, Malaysian economy is expected to contract by 2% this year. However, echoing to the current outlook for Malaysia, the World Bank has revised its initial 4.5% growth forecast for 2020 down to only 0.1%. On the employment front, the Malaysian Institute of Economic Research estimates that about 2.4 million may lose their jobs. Please explain in detail how could covid-19 affect Malaysian economy using the framework discussed in Chapter 20-22. Try to be as comprehensive as possible.

The chapters are : Chapter 20-Aggregate Demand and Aggregate Supply

Chapter 21- The Influence of Monetary and Fiscal Policy on Aggregate Demand

Chapter 22- The Short-Run Trade-Off between Inflation and Unemployment

The chapter is according to the book written by N. Gregory Mankiw

Principles Of Macro Economics

Ninth Edition