Question

What Macro & Microeconomic theories are used in the Australian Government’s response to the Coronavirus? List three theories for each.

Answer 1

Answer

Macro economic theories used in response to Corona Virus are:

1. Decrease the tax rate so as to boost the consumption of the citizens

2. Reduction in Repo Rates by the the Central Bank in order to allow banks to make more loans and increase the money supply.

3. Purchase of Government bonds by the Central Bank so that there is more money in the hands of the public.

Micro economic theories used in response to Corona Virus are:

1. Increased funding to MSMEs (Micro Small and Medium enterprises) so as to protect them from getting bankrupt.

2. Export of ethanol produced by sugar mills was most likely banned because it is used in sanitisers that are currently much needed.

3. Imposing a restriction on the quantity of essential items one can buy.