This report provides a macroeconomic analysis of Australia's recession during 2018-2019, focusing on the role of government intervention. It examines various macroeconomic factors, including aggregate demand and supply, and discusses the impact of events like the US-China trade war on the Australian economy. The report explores Keynesian economic theory, explaining how government policies, such as fiscal and monetary measures, are employed to address economic inefficiencies and stimulate growth. It details the Reserve Bank of Australia's interest rate cuts and analyzes the effectiveness of expansionary and contractionary fiscal policies. The analysis highlights the significance of government spending, taxation, and monetary policy in managing inflation, unemployment, and overall economic stability during a recession. The report concludes that both fiscal and monetary policies are crucial for economic recovery, emphasizing the importance of understanding macroeconomic variables for effective decision-making.