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On March 4, the International Monetary Fund (IMF) and the World Bank held a joint news conference on the impact of the COVID-19 on the
On March 4, the International Monetary Fund (IMF) and the World Bank held a joint news conference on the impact of the COVID-19 on the global economy and the responses from global governments and central banks.The policy tracker page in the IMF website summarizes the key discretionary fiscal and monetary policies that governments are taking to tackle the economic impacts of the COVID-19 pandemic. Consider the following examples.
- Many governments have adopted policies to help firms and business to avoid bankruptcies and lay-offs, such as offering relief on tax and wage costs and funding banks to lend to firms that are suffering. The main purpose is to avoid the potentially temporary negative supply shocks to become permanent. Discuss why it is important to keep the negative supply shocks temporary.(10%)
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