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Treasurer Josh Frydenberg (above) recently announced that the Australian Government will stop its support payments to businesses once COVID vaccination target of 80% is achieved
Treasurer Josh Frydenberg (above) recently announced that the Australian Government will stop its support payments to businesses once COVID vaccination target of 80% is achieved among the population. Refer to the AD-AS model shown. CPI AD AS 160 150 140 130 E1 120 110 100 1000 1100 1200 1300 GDP ($000) Discuss the effect that a reduction of these payments will have on Australia's economy, ceteris paribus. Your answer should consider the following whether such action comes under monetary policy, demand-side fiscal policy or supply-side fiscal policy and why. the effect this will have on Australia's current budget deficit. if this has an expansionary or contractionary effect using the GDP = C + I + G + X - M model of the economy, commenting on G, C, the spending multiplier and its effect on GDP. the direction that AD and/or AS curves will shift. what the new GDP, CPI may be based on the data in the given model. 5 marks
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