Global economic recovery is a process that takes place after the effects of a pandemic. Moreover, the economics are secondary to the health consequences for any pandemic with significant fatality rates. The economics are important as they provide a warning to avoid drastic measures. Contrastingly, economic recovery is a business cycle stage that follows a recession. Additionally, it is a period of improving business activities. During an economic recovery, the gross domestic product grows. Also, the incomes rise and the rate of unemployment falls as the economy is rebounding. The economy undergoes a process of economic adjustments and adaptations to the new conditions such as the rules and policies that the government rolls out.
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THE EFFECTS OF A PANDEMIC TO THE ECONOMY
One of the least effects of a pandemic is the fall in production. This is due to the increase in the number of people who fall sick. It has a minimal effect because the firms have ways of compensating for this. This is through the adjustments and adaptations that take place within the firms to restore productivity. However, the effect on productivity depends on the number of people that get sick. Also, a pandemic may cause a demand shock in some sectors especially those that involve personal contact with other people. These conditions may eventually restore during a global economic recovery.
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THE PROCESS OF GLOBAL ECONOMIC RECOVERY
In a recession period, several businesses go out of business. Those that manage to survive the effects of a pandemic cut back their activities to reduce the costs of operation during periods of low demand. Other adjustments and adaptations include laying off workers and selling business assets. The process of sorting workers and capital goods into new combinations is the essence of global economic recovery. During the recovery, businesses reorganize capital and productive labor to account for the changes in the economy.
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