Consider the following statements: The K-shaped recovery implies that ...
Explanation:
K-shaped Recovery:
- The statement that the K-shaped recovery implies that there are inequalities in the recovery process is correct.
- In a K-shaped recovery, different segments of the economy recover at different rates, leading to increased disparities between various groups.
- While some sectors or individuals may see rapid improvement, others may continue to struggle or even face further challenges.
- This uneven recovery exacerbates existing inequalities within societies.
V-shaped Recovery:
- The statement that in V-shaped recovery jobs are permanently lost is incorrect.
- A V-shaped recovery is characterized by a sharp and quick economic turnaround after a sharp decline.
- In this type of recovery, jobs that were lost during the downturn are typically regained as economic activity picks up.
- Therefore, jobs are not permanently lost in a V-shaped recovery.
Conclusion:
- The correct answer is option 'A', as the first statement is accurate while the second statement is not entirely true.
- Understanding the different types of economic recovery is essential in assessing the impacts on various sectors and groups within the economy.
Consider the following statements: The K-shaped recovery implies that ...
- A K-shaped recovery occurs after a recession when certain parts of the economy resumes growth while others lag behind indefinitely
- In a K-shaped recovery different sections of an economy recover at starkly different rates.
- Rich households have seen their incomes largely protected, and savings rates increased during the lockdown, the scope of future consumption. But households at the bottom are likely to have witnessed permanent hits to jobs and incomes. Hence, statement 1 is correct.
- V-shaped recovery: It is the next-best scenario after Z-shaped recovery in which the economy quickly recoups lost ground and gets back to the normal growth trend-line.
(i) In this, incomes and jobs are not permanently lost, and the economic growth recovers sharply and returns to the path it was following before the disruption. Hence, statement 2 is NOT correct.