Practical challenges of fiscal/monetary response to COVID-19 situation in the USA

Abstract

The article’s main objective was to analyze sentiment, financial markets, and Consumer Price Index (CPI) emotional impact. It narrates and summarizes the changes that have occurred since the onset of the financial crisis and financial recession in 2003. Data document review is the main method used to collect data for the article. The article borrows concepts and theories from the cited sources. As per the article, it is hard for the government to target specific parts of the economy. The mainstream economic limits in the covid-19 era disproved several theoretical pillars of the mainstream economy. According to studies, conventional economic theory holds that people are constantly eager to adapt their requirements and satisfactions to better their balance sheets for increased utility. The demand and supply rules serve as the foundation for modern economics models. It demonstrates how the market continually seeks equilibrium. One of the key tenets of orthodox economics is that since economists are practical by nature, it follows that everyone wants their unique needs to be satisfied. People occasionally judge and make decisions, which is the limitation of contemporary mainstream economics in addressing real-world issues. The key dangers are that these markets could cause the real economy to suffer from risk re-pricing, decreased confidence, falling asset values, and tighter financial conditions. Mainstream economics influences most people’s lives aspects. Its majority dealings are at the house level and are deeply flawed in terms of their real-life impact. Individuals commonly follow market trends and predictions, and any shift will undoubtedly impact the individual.