In the long-run, the aim of the Australian government is not just to recover from the...

In the long-run, the aim of the Australian government is not just to recover from the current recession and reduce the output gap to zero but also to increase the potential output of the economy. What economic policies do you advise to the Australian government to increase the potential output of the Australian economy in the long run.

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Expert Solution

The output in then long run will increase when the labor force increase, the capital increases in the economy or the technology changes. My advice to the Australian government will be to:

Allow immigrants from the nations, especially those immigrants who are well qualified in their feild.
Allow easy flow of FDI in the nation that will increase the capital of the nation.
INvest in infrastructure , human capital and technology development in the nation.

All these measures will help increase the outcome in the long run.

Rahul Sunny answered 1 year ago

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