Microeconomic Impact of the Russia-Ukraine War

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MICROECONOMIC IMPACT OF THE RUSSIA-UKRAINE WAR
A CASE ASSIGNMENT
Presentation by
Economics Help Desk
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What is the Microeconomics Impact of
Russia-Ukraine War?
War between Russia and Ukraine, which began in
2022, has impacted the world economy.
Microeconomic repercussions of the crisis cannot
be ignored alongside sanctions and global supply
chain disruptions. This blog article investigates
the microeconomic repercussions of the war since
the result will interest economics students.
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Impact on Households
Through economic effects, the conflict has
affected Ukrainian and Russian households and
others.
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Price Levels and Inflation
Price levels have been affected. Ukraine and
Russia are major providers of wheat, maize, and
energy. Disrupted shipments have raised global
prices.
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Employment and Income
This tragedy has damaged numerous buildings and
left many homeless, losing their incomes. The
conflict killed almost 4.8 million workers and
paid employees of productive industries,
according to the ILO.
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Impact on Firms
Companies doing business with Russia and Ukraine
face interruption, higher costs, and market
instability.
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Supply Chain Disruptions
Neon gas, required to make semiconductors, was
scarce in vehicle manufacturing. Due to this,
global manufacturing corporations have reduced
output and raised costs.Due to war-related supply
chain difficulties halting manufacturing.
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Market Structures and Competition
It also changed market rivalry and industrial
structures.Russia is a top producer and exporter
of oil and gas. War and restrictions on Russian
exports have shifted energy sectors
internationally. EU nations, who are heavily
reliant on Russian gas, are seeking other
suppliers, increasing energy sector rivalry
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Consumer Behavior
Numerous nations' consumers now only spend on
basics. In places with economic swings, families
have had to save more out of anxiety. In Poland,
a neighbouring nation significantly impacted by
Ukrainian migrants, household savings climbed
from 5 to 8 in the first half of the year when
the crisis started
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Policy Measures Adopted by Governments
Some governments have imposed subsidies and price
limitations to combat food and energy inflation.
Subsidies and Price Controls
Due to wartime inflation, central banks have
changed their policies as follows. The European
Central Bank (ECB) raised interest rates for the
first time in over a decade to combat growing
inflation.
Monetary Policy
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