Question
Read the article given below and answer the following questions (a) The article says the Australian economy experienced a contraction due to the COVID-19 lockdowns.
Read the article given below and answer the following questions
(a) The article says the Australian economy experienced a contraction due to the COVID-19 lockdowns. Using the aggregate demand / aggregate supply (AD/AS) model explain why the lockdowns caused this contraction. (You do not need to draw a diagram.) (5 marks)
(b) What kind of fiscal policy response to the contraction might the government have considered? Explain how this response would work using the AD/AS model. (You do not need to draw a diagram.) (5 marks)
https://www.abc.net.au/news/2022-12-07/gdp-increases-0-6-per-cent-in-september-quarter/101742812
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Solution a The contraction in the Australian economy during the COVID19 lockdowns can be explained using the aggregate demandaggregate supply ADAS mod...
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Macroeconomics Principles Applications And Tools
Authors: Arthur O Sullivan, Steven M. Sheffrin, Stephen J. Perez
7th Edition
978-0134089034, 9780134062754, 134089030, 134062752, 978-0132555234
