Question
The fiscal policy response to the pandemic-led recession in Australia using the multiplier AD model Australia, alongside other capitalist economies, was thrusted into a pandemic-led
The fiscal policy response to the pandemic-led recession in Australia using the multiplier AD model
Australia, alongside other capitalist economies, was thrusted into a pandemic-led "household recession" during the first half of 2020, but the economy has since recovered - for now.Consider the fiscal stimulusresponses by the Federal government where the Australian economy averteda prolonged recession.
Use the multiplier AD model diagram to illustrate and explain in detail how the economy shifted out of a "household recession" to a recovery by the end of 2021. In your diagram, begin the Australian economy in the first half of 2020, during the height of the global pandemic. In your answer, explain the multiplier process, and assume the size of the multiplier is 1.8.
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