University Economics Assignment: Coronavirus Impact on Australia

This assignment examines the economic impact of the Coronavirus outbreak on the Australian economy. It analyzes the effects on GDP components (consumption, investment, exports, and imports), highlighting the negative impact due to lockdowns, reduced demand, and disrupted supply chains. The assignment discusses why low inflation is a bad sign for the Australian economy, linking it to sluggish economic growth and reduced consumer spending. It then explores the author's view that the Federal Reserve's rate cuts might backfire, arguing that in the current crisis, people are more inclined to save than spend, thus potentially decreasing production and GDP. Finally, the assignment concludes with the author's recommendation for the Australian government to implement expansionary fiscal policy, specifically increasing government expenditure, to stimulate the economy in response to the crisis.