QUESTION 1: GDP, INCOME AND ECONOMIC GROWTH
“Whilst recession is now inevitable, we have not experienced a “normal” entry to an economic downturn”(Gigi Foster quoted in Koukoulas 2020).
Discuss the extent to which the current downturn in GDP is not representative of a normal recession.
QUESTION 2: UNEMPLOYMENT AND INFLATION
“The Federal Government’s $130 billion JobKeeper wage subsidy will disguise much of the impact of the crisis on employment. Some Australians off work will continue to be regarded as ‘employed’ because they will receive pay from their employer via the JobKeeper scheme. And others, especially older workers, will give up looking for work and will therefore not be counted in the unemployment rate.” (Coates et al. 2020)
With reference to the classification of unemployment by the ABS, discuss why the reported unemployment figures may disguise the impact of COV19 in Australia.
QUESTION 4: FISCAL POLICY
As result of the global pandemic crisis (COVID-19) Australia’s national debt is expected to reach its highest level since World War II. Explain why debt is a necessary consequence of the use of appropriate fiscal policy tools.
QUESTION 5: INTERNATIONAL TRADE
“Trade is essential to save both lives and livelihoods … in the context of the severe economic strain from COVID-19, it is more important than ever to avoid escalation of the current trade tensions” (OECD 2020).
Explain why governments increasing restrictions on major trading partners to protect key sectors may be damaging to economic recovery.