This case study focuses on the Australian economy in 2019, before the COVID-19 pandemic hit. On 4
Question:
This case study focuses on the Australian economy in 2019, before the COVID-19 pandemic hit.
On 4thSeptember 2019, the Australian Bureau of Statistics (ABS) published Real GDP data for the quarter ending June, 2019. (The reporting of GDP always lags by about 2 months as it takes time to collect and compile data). The data showed that the Australian economy recorded a quarterly growth of 0.5%.
However, there was a decrease in Real GDP per capita. Furthermore, Real GDP per capita in June 2019 was lower than it was a year before (June 2018). Overall, while Real GDP still increased, the growth was very weak; the weakest on record since March 2001. (Source: Australian Financial Review and The Guardian).
1. Draw an appropriate graph(s) to illustrate the Australian economy in June 2019, considering the previously described economic conditions.
2. Given the economic conditions described above, recommend the appropriate monetary policy that the Reserve Bank of Australia (RBA) should implement. Clearly explain why this type of monetary policy is needed.
3. Describe in detail the steps the RBA must undertake to implement the monetary policy suggested in Question 3.
4. Given the economic conditions described above, recommend the appropriate fiscal policy that the federal government should implement. Clearly explain why this type of government policy is needed.
5. Describe in detail the actions the federal government should undertake to implement the fiscal policy suggested
Expert Answer:
