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As many of you may already know, the spread of coronovirus is causing widespread panic in the stock market where shares have
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The fear of the epidemic has already disrupted the supply chain of the economy and has reduced the overall growth rate in the economy. In this scenario, it has been observed that households are also reducing their consumption demands and saving more not for investment purposes but for emergency purposes to prevent any epidemic in the future and if the epidemic arises in their family , they have sufficient funds with them to meet this change. Thus, the overall savings of the individual has increased. This has reduced aggregate demand in the economy because of fall in consumption expenditure in the economy. This has resulted in fall in price level and real GDP in the economy and thus overall growth rate has fallen in the economy.

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