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.

Watch the 9-minute video of the speech of Ms. Georgieva, IMF director, posted on Moodle: Joint Press Conference on COVID-19 by IMF Managing Director and World Bank Group President (extracted). The full version is available on IMF website:https://www.imf.org/en/News/Articles/2020/03/05/tr030420- imf-wb-joint-press-conference-on-corvid-19

1. In the video, Ms. Georgieva mainly discussed the economic impacts of COVID-19. Based on her speech, summarize the demand and/or supply shocks resulted from the COVID-19 pandemic. Discuss, with the aid of an AD-AS diagram, the economic impacts of COVID-19.(20%)
2. 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.
3. (a)The People's Bank of China (PBOC), China's central bank, has lowered its required reserve ratiofor commercial banks by 50-100 basis points (one basis point = 0.01%). Discuss how this policy would affect the money market. Using the AD-AS diagram to explain the impact of impact of the policy.(10%)
4. (b) In U.S., an estimated of US$2.3 trillion (around 11% of GDP) of Coronavirus Aid, Relief andEconomy Security Act ("CARES Act") was passed. It includes tax rebates to individuals,expanding unemployment benefits, and so on. Use the AD-AS diagram to explain the impact of impact of the policy.(10%)
5. (c) 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%)