5. (3 marks) Have a look at the following article, https://www.theguardian.com/b

Question

5. (3 marks) Have a look at the following article, https://www.theguardian.com/business/grogonomics/2018/mar/08/australia-isnt in-recession-but-we-might-as-well-be Supposing the Australian economy is heading for a recession, what should (or can) the current government now do to deal with this? Use the economics knowledge that you have acquired in this course so far to elaborate your discussion. You need to write at least half a page in length (please do not use bullet points). Note that presenting a list of reference is preferred. But not required.

Explanation / Answer

The Government of Australia not like a household. It needs to act like a bank. When Australian government is running a balanced budget is acting like a bank which simply lends back as much as it gets in repayments, thus the money supply never grows and without that, you Australia can't have a growing economy. However it is not the current scenario in Australia and the nation may lead to recession. In this scenario the best approach for the government will be to sell assets and reduce debts. A medium-term oriented monetary policy, forward-looking by government can provide the best framework to this purpose. Fiscal policies also have a medium to long-term orientation and largely rely on automatic stabilisers in the short-duration. Moreover the other main cause is population growth which is flattering economic data. An accelerating immigrant has resulted to weak low wage growth, over-burdened infrastructure, soaring housing prices and over-priced housing. A government policy on potential migrants especially categorised as skilled workers should be allowed.

Reference:
http :// timesofindia.indiatimes.com/articleshow/63285665.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

https :// www. ecb.europa.eu/press/key/date/2005/html/sp051114.en.html

Related Questions

Navigate

• Browse (All)
• Browse 5
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.