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IMPACT OF DROUGHT ON THE MACROECONOMIC EQUILIBRIUM IN AUSTRALIA

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Using appropriate diagrams, explain the likely impact of drought on macroeconomic equilibrium in Australia. Use evidence drawn from media reports to illustrate you answer.How might government policy response to the drought modify the macroeconomic impact of the drought?...

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Using appropriate diagrams, explain the likely impact of drought on macroeconomic equilibrium in Australia. Use evidence drawn from media reports to illustrate you answer.How might government policy response to the drought modify the macroeconomic impact of the drought?

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The effects of drought on the Australian economy bring up a lot of issues which had disrupted the demand and supply of goods and services in the country. In the year 2002-03,Australia had been affected by a severe drought condition which caused inflation, lower income for farmers, increase in food and livestock prices, lesser crop growth, to name a few. This paper aims to analyze the impact of drought on the macroeconomic conditions of Australia, and how it can be mitigated with the help of government intervention and the use of certain tools like economic principles, policies, and other important ways.

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