Some economists hold the views that Australia is heading to a recession (e.g., see such a view, https://www.abc.net.au/news/2016-07-29/australia-headed-for-recession-next-year,-professor-keen-says/7674154
Supposing the Australian economy is heading for recession what in your view should (or can) the current government do to deal with this? Use the economics tools that you have studied in this course to elaborate a discussion. You need to write at least half a page in length. Note that presenting a list of reference is preferred. But not required.
- What is the role of the central bank and commercial banks in the process of money multiplication?
- What do you think happens to the money multiplier in a financial crisis (like the one we had in year 2008), and why?
- Through what instrument does the central bank carry out monetary policy? How do the bank's actions transmit through the economy?