Explain the macroeconomic impact of the 2020 COVID Crisis on the US economy, discussing the government policy response and the implications for one sector of the US economy.

1. Identify one of the initial direct effects (shocks) of the COVID crisis on the macroeconomy and describe the circumstances surrounding the specific effect you selected. Analyze the impact of this shock by using the AD-AS model and its corresponding diagram.Describe the impact on the aggregate price level and output and identify the resulting short-run equilibrium in a diagram. Assume that the economy was in long- and short-term equilibrium before the shock.
2. Using the AD-AS diagram created in Requirement 1, identify and evaluate the impact of one government policy response to the channel you selected and its effect on the short-run equilibrium of the economy.
3. Using your AD-AS diagram created in Requirement 1 and modified in Requirement 2, describe the process by which the economy may return to its long-run equilibrium.What are your long-term predictions for equilibrium output and the price level?
4. Based on the predictions for output and the price level from Requirement 1, 2 and 3, discuss one implication for an industry of your choosing. Discuss both the short-run and long-run implications for this industry.