🎛️ Simulation · Intermediate
A Pandemic Hits
A severe pandemic forces businesses to close and people to stay home. Confidence collapses.
The facts
- Disaster / pandemic severity rises to 80 out of 100.
- Consumer & business confidence falls from 60 to 25.
- No policy response yet — rates and spending unchanged.
Your predictions
Playing it out…
Why?
A pandemic hits both supply (businesses can’t operate) and demand (people stop spending). GDP falls, unemployment spikes and stocks drop as expected profits fall and fear rises. Even without new spending, the deficit grows: tax revenue falls in a recession and safety-net programs like unemployment insurance pay out more. These are called automatic stabilizers.