Economic challenges from the pandemic
Consider how the COVID-19 pandemic has affected Australia’s aggregate economy during the first twelve months of the pandemic, with respect to the following challenges. For each challenge, write a brief observation using your economic knowledge, and gather some data to support your observations. Source relevant statistics from government databases.
1. Costs of living
• What happened to the Consumer Price Index and inflation/deflation in Australia?
• Briefly explain the problems associated with high inflation, and why very low inflation or deflation should also be considered a problem?
• Explain the problems that can occur to someone who has many loans when inflation ends up being different from expectations.
