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The covid 19 is a pandemic which spread like a wildfire in the world economy. Even though the viral disease started in China, it spread to other countries like a wild wind. The US economy, European countries, central Asian countries etc are very much affected by the Covid 19 pandemic. The pandemic had caused many economical issues along with the health of the people.
The covid 19 created a demand side shock to the economy. As people were in panic of the fast paced spread of the disease, they started to demand more goods and services in the economy to stock for their future needs. People expected the quarantine period and started to stock the goods and commodities that are needed to meet the quarantine period. This created the demand shock in the economy. The fear of people about the disease caused the production to shrink in the economy which leads to the supply side shocks in the economy. the supply curve shifts to the left whereas the demand curve shifts to the right.
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