Explain and illustrate how the government and central bank could alleviate the current recession with fiscal and monetary policy. Are there any potential problems with such policies?

 

Your company is considering the implications of the coronavirus recession and requires you to produce an academically credible report (i.e. including references etc) on the potential economic repercussions in terms of the likely business environment it will face. Discuss BOTH of the following issues:

Given that the company is within an oligopolistic market structure, explain the consequences of entry barriers in terms of the prices and outputs. Use a framework to illustrate the implications for changes to the company’s pricing strategy.

Explain and illustrate how the government and central bank could alleviate the current recession with fiscal and monetary policy. Are there any potential problems with such policies?

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