Herding is part of human behavior. It plays a role in creating financial bubbles which cause economic recessions. There is safety in numbers. People want to belong. If you see a crowd, there must be an attraction. If others are investing in housing or hot stocks, there must be a buck to be made. You don't want to miss out. It's part of human nature. Watch Herd Behavior video: https://youtu.be/7HYDxQQ2ygQ?si=MeJgkjJwsn5D49At 1) Consider your own behavior, have you ever done a "herd behavior"? 2) In your opinion, why are so many people often becoming victims of unscrupulous individuals who give them "hot stocks" tips or advice about investments with extremely high returns? https://www.cdc.gov/ncird/downloads/fs-flu-plan-response.pdf https://www.cdc.gov/nchs/fastats/deaths.htm Number of deaths for leading causes of death annually: • Heart disease: 647,457 • Cancer: 599,108 • Accidents (unintentional injuries): 169,936 • Chronic lower respiratory diseases: 160,201 • Stroke (cerebrovascular diseases): 146,383 • Alzheimer's disease: 121,404 . Diabetes: 83,564 • Influenza and Pneumonia: 55,672 • Nephritis, nephrotic syndrome and nephrosis: 50,633 • Intentional self-harm (suicide): 47,173 https://www.cdc.gov/flu/weekly/index.htm https://coronavirus.jhu.edu/map.html Look at these data and answer these questions below critically. 1. a) In the first week of class, we learned about costs and benefits in economic decision making. What are the benefits of a government mandated economic lockdown? b) What are the costs of a government mandated economic lockdown? c) Looking at your answers from parts a) and b), does it make sense for governments around the world to respond to the COVID-19 pandemic the way they have had? 2. California has a population of roughly 40 million people. In the early days of the Covid-19 pandemic, California Governor Gavin Newsom said over 25 million Californians would get infected with Covid-19 (https://www.cnbc.com/2020/03/19/coronavirus-california-estimates-25point5-million-resi dents-56percent-of-the-state-will-get-virus-in-next-8-weeks.html). a) Should Governor Newsom show Californians the data and mathematical estimates of how he came up with the potential 25 million infections? c) In hindsight, why was the governor's number of infections way off? 3. Air travel is an essential thing of modern living. Without air travel, the Covid-19 virus would have not be able to spread very quickly. Lessons learned for future pandemics, should the U.S. government shut down or limit a lot of air travel into the country for a period of time and explain your reasons? Questioning Conventional Wisdom in the COVID-19 Crisis, with Dr. Jay Bhattacharya Transcript https://www.hoover.org/research/questioning-conventional-wisdom-covid-19-crisis-dr-jay -bhattacharya-1 1) What is the formula for measured case fatality rate? 2) What is wrong with the denominator of this formula? 3) What is PCR (polymerase chain reaction) test? 4) What kind of test is used to show the correct number of people infected in the population? 5) Dr. Jay Bhattacharya says the fatality rate could be 0.1% like the flu or 1% (which is high), what are his suggestions for dealing with each scenario? 6) To understand the problems associated with unemployment: a recession is when your neighbors lose their jobs; a depression is when you lose your job. COVID-19 has destroyed our way of life and halted the U.S. economy. Dr. Jay Bhattacharya argues that many lives lost from the destruction of the global economy is just as or much worse than the lives lost from COVID-19, do you agree or disagree with his argument in the video? Explain your reasons. 7) Dr. Jay Bhattacharya says that it is a new normal for pandemics to occur more often in the future. What are some of the recent pandemics that he mentions in the video? 8) Why does Dr. Jay Bhattacharya ride his bike to work? Please Watch Nightly Business Report - August 5, 2019 https://youtu.be/LD7RfNNELIY?si=9dsXq9xq4PouKRrf 1. Write a short summary of the current trade war (2 paragraphs or more). 2. What were the benefits to China when its currency Yuan fell to its lowest level against the Dollar in more than a decade? 3. What was the amount of the global currency market? 4. From the video, did China manipulate its currency Yuan to help its exports?