In economic terms, Covid-19 can be described as

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To analyze Covid-19 in economic terms, consider how it affected both demand and supply in various ways. 
Option 1: 'Supply shock only.' This misses the broader impact: while supply chains were disrupted (a supply shock), the pandemic also dramatically changed consumers' willingness and ability to spend, altering demand. So labeling it as supply shock only is incomplete. 
Option 2: 'Demand shock with supply shock effects.' This aligns with the real-world picture: demand fell due to lockdowns, health concerns, and income losses, while supply was simultaneously constrained by factory shutdowns, logistics disruptions, and labor shortages. The combination captures the contemporaneous shifts in both sides of the market. 
Option 3: 'Demand Shock only.' This ignores the substantial supply constraints that occurred—factories paused, ports faced backlogs, and transportation slowed—so it overlooks a key dimension of the crisis. 
Option 4: 'Supply shock with demand shock effects.' This emphasizes supply disturbances and implies some demand response, but it downplays that the primary and immediate disruption was also driven by a sizable collapse in demand across many sectors, not just supply. In practice, both channels operated together, not in a one-way manner. 
Overall, the most accurate framing is that Covid-19 caused a demand shock with supply shock effects, reflecting strong reductions in spending alongside notable reductions in production and distribution capacity.

W25 ECON D001 52Z Prin Macroeconomics FinalExamECON1

In economic terms, Covid-19 can be described as

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