virus versus economy - Inquisitive Cubs

1. VIRUS VERSUS ECONOMY - Mr. DEEP DAWAR Hello Inquisitive Cubs, you must be listening on the TV these days a lot about how coronavirus is affecting our economy! So, what does economy really mean? Well, the word economy comes from Greek οίκος –"household" and νέμoμαι –"manage”, is an area of the production, distribution and trade, as well as consumption of goods and services by different agents. Let me simplify… Imagine a big machine with lots of cogs in it, some small and some big and some very big cogs. All these cogs need to work together to make the machine to work, the machine can be called world economy, biggest cog being the economies of the countries, economies of different companies and businesses and finally the smallest but also most important cog of a family economy. Because of corona virus the smallest cog which is the most basic and the most important cog has stopped working well it hasn't stopped as much as it has paused. See when your mama or papa goes to work, they bring back the reward of the hard work which is money and they spend that money on a number of things for example 1. Taxes 2. Food 3. Clothes

2. 4. Chocolate shakes 5. Video games 6. Other of your favourite things. As nobody is able to go out during this pandemic, it has slowed down the cog which means we are all earning slightly less which in turn means we are paying slightly lesser taxes, which in turn means the government has less money to spend on things like roads, infrastructure, policing, ambulances, hospitals and all the other things that we associate with of modern society. As we are also in lockdown to save lives we are not going out to our favourite restaurant to buy that burger which in turn is slowing down the bigger cog of businesses who are earning less than before and hence are having to reduce their cost which in turn means that they have to lay off people or spend less on buying the stuff that goes into the burger which in turn means that lesser people are earning and paying taxes which if left unchecked becomes a negative cycle and causes negative growth known as the recession! You can now understand every time you don't do an economic activity it has a ripple effect. By the way we humans like to measure everything, it doesn't stop after you pass out from school, when it comes to economic performance we measure the activity of the cogs every 3 months, when you have two consecutive 3- months period where the machine performs slower than the previous three months, we term that period of six months as recession meaning we have

3. spent and earned and produced less in the past six months, the world has seen a huge amount of growth of economic activity over the past 10-years which means the machine has been working well but with coronavirus all the little cogs have come to a standstill which is causing overall concern, especially in poor countries where people depend on daily wages and daily earnings to get through and if there are too many people who are out of work and cannot feed this can cause civil unrest with people going on strikes and stopping other essential services which causes general unrest in the society. So now you understand why this virus is such a big concern for the economy. Maybe it is time to change how the economy works, maybe it is an opportunity to create a more sustainable future which is planet friendly so maybe it is not all bad. After all that they say "Why let a good crisis go to waste?" Deep Dawar - With 18 years of corporate experience, Deep is still a student at the University of LIFE. He keeps himself abreast of a wide ranging Topics from Economics to Science, from Art to Politics. While his first love is watching sports and playing video games.