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Potential drawbacks of these policies in the short term

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The price of iron in Australia ore declined significantly from 2014-2015 with small recovery in 2016. Other mineral prices have decreased, significant increase in the unemployment rate and a large decrease in investment in the mining sector have occurred. The government budget deficit has also increased due to lower mining-related tax revenues. Discuss these following implications to output, unemployment, the exchange rate, and the current account balance. Do you think that the fiscal and monetary policies employed have been appropriate? What policies would be recommended going forward, and what are the potential drawbacks of these policies in the short term?

Reference no: EM132004471

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