This economics assignment analyzes the impact of government policies on the economy, focusing on fiscal and monetary strategies. Part 1 examines the argument for and against a sugar tax in Australia, discussing its potential health and economic benefits, alongside counterarguments regarding inelastic demand. Part II delves into Keynesian economics, explaining the demand-side policy and the role of government intervention during recessions. It further explores automatic stabilizers and discretionary fiscal policies, evaluating their effects on budget deficits and macroeconomic performance. The assignment also assesses the effectiveness of monetary policy as an economic stimulus, comparing it with fiscal policy and addressing the challenges of timing and implementation.