ABSTRACT
The economy consists of individuals engaged in economic activities, including working, manufacturing, producing, buying, and selling. The economy provides a mechanism in which consumption spending leads to business revenue and eventually household income. The circular-flow model demonstrates connection between the demand and supply sides of the market. The loops in the circular-flow model provide a framework to address the sequence of events that begin with economic shutdown and continue with recession. Economists characterize business cycles in four stages of varying length: expansion, peak, recession, and trough. Macroeconomic trends demonstrate changes in economic activity. Finally, with respect to macroeconomic forecasting, the interaction of epidemiological and economic conditions complicates the process of identifying potential future outcomes. Forecasting presents several challenges, including modeling assumptions, a changing economy, and statistical techniques; however, during a pandemic, macroeconomic forecasting presents additional challenges.
