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Bushfires affect the economy in many ways, for example the price of food rising, the value of money changing and insurance companies in debt because they have to pay for damages.
The cost of food rising when a bushfire has occurred is because many farms providing the food are burnt down. When the farms are damaged or even destroyed, they cannot produce any food for our communities. This means food is more valuable, and consequently, the price of food rises.
The reason the value of money changes when a bushfire occurs is because many businesses can be destroyed in the bushfire. If businesses are damaged, that means people cannot work at the businesses. If people cannot work at these businesses, people do not receive any money. This also means that people cannot pay for their food, electricity, water and basic resources, making them in debt. If people are in debt, the value of money changes and can sometimes become unstable.
The reason that insurance companies become in debt is because they have to pay for all the damage that is caused by a bushfire. Insurance companies cannot just ignore the damage to the lives of their users because, then their reputation is damaged. This means that if insurance companies pay for the damages, they are usually in debt. If companies are in debt, this causes the economy to change for the worse and also, like above, make the value of money change.
The economy definitely changes when a bushfire occurs. I hope I have informed you on the changes in our economy when a bushfire happens.
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∙ 11y ago
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