Question

What are RBA strategy in order to overcome negative GDP and decrease unemployment rate during COVID...

What are RBA strategy in order to overcome negative GDP and decrease unemployment rate during COVID 19, and use EVIDENCE and GRAPHS then DISCUSS in Further DETAILS to prove if the strategy is effective or not in order to help Australian economy.

Homework Answers

Answer #1

To overcome negative GDP and falling unemployment during Covid 19, RBA must adopt expansionary monetary policy such that everyone have more cash holdings with them which raise their willingness to pay for goods thereby raising aggregate demand. Rise in aggregate demand will raise GDP level and unemployment level fall due to more output produced. Additionally, reduced interest rate due to expansionary monetary policy will also raise investment level and help improving GDP.

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