Question 1: Consider the following article below.

According to the article, is Australian economic growth increasing or decreasing compared to previous years? Provide some evidence from the article supporting your view.

Country facing a lost decade of growth, ANZ warns

By Shane Wright (Sydney Morning Herald, 21 January 2020)

Australia is facing a lost decade of economic growth, ANZ has warned, that will see livingstandards slip and wages grow modestlywhile putting pressure on the Morrison government's plan for a string of budget surpluses.

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ANZ head of Australian economics David Plank said growth through the current decade would average 2.6 per cent, with that tippedto fall to between 2 and 2.5 per cent across the 2020s. He said that level of growth, lower than both estimated by theReserve Bank and the federal Treasury, would be driven by tepid non-mining business investment, weak productivity and householdconsumption held back by high debt and modest wage increases.

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Australian households, despite record levels of wealth due to high house prices, were carrying record levels of debt that wouldcrimp their spending plans.

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In its December budget update, Treasury forecast economic growth to lift to 2.75 per cent through 2020-21 and then climb to 3 per cent for the next two years. That level of growth is expected to help drive down unemployment and push up wages.

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question 2: Should the authorities implement expansionary or contractionary fiscal and monetary policy? Explain why. What effect would these policies have on aggregate demand (AD)?