On 20 April 2021, the Government of Bangladesh announced an additional BDT 105 million allocation as relief for people affected by the lockdown in the country. This brings the total government disbursement of COVID-19 related payments to low-income families to around BDT 9.3 billion. Most of these allocations have been made directly into the accounts of the low-income families via money-transfer apps such as bKash, Nagad, etc. Keep in mind that while the lockdown is in effect, many people cannot work. This means that output of the economy is at a low level. a. Using a diagram, explain what effect these transfers will have on the loanable funds market. b. Do you expect the effect of these transfers on the loanable funds market to be large or small? Explain. c. Explain the effect of the lockdown on price-level and output of the economy.

On 20 April 2021, the Government of Bangladesh announced an additional BDT 105 million allocation as relief for people affected by the lockdown in the country. This brings the total government disbursement of COVID-19 related payments to low-income families to around BDT 9.3 billion. Most of these allocations have been made directly into the accounts of the low-income families via money-transfer apps such as bKash, Nagad, etc. Keep in mind that while the lockdown is in effect, many people cannot work. This means that output of the economy is at a low level. a. Using a diagram, explain what effect these transfers will have on the loanable funds market. b. Do you expect the effect of these transfers on the loanable funds market to be large or small? Explain. c. Explain the effect of the lockdown on price-level and output of the economy.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

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