It appears that there was an economic drop during the 2019-2021 period as a result of the pandemic. Assume that we can view this as a negative shock to private investment, due to a combination of lockdowns and uncertainty about the world. In under 150 words, answer the following question: Was government consumption expenditure used as stabilisation policy following the slow-down during 2020 and 2021? (Note, you only need to discuss this in terms of our demand model of Income-Expenditure, IS-MPR, and Aggregate Demand.)

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  1. It appears that there was an economic drop during the 2019-2021 period as a result of the pandemic. Assume that we can view this as a negative shock to private investment, due to a combination of lockdowns and uncertainty about the world. In under 150 words, answer the following question: Was government consumption expenditure used as stabilisation policy following the slow-down during 2020 and 2021? (Note, you only need to discuss this in terms of our demand model of Income-Expenditure, IS-MPR, and Aggregate Demand.)

Year

Government consumption per capita ($) (rounded to a whole number)

2003

6672

2004

6820

2005

7016

2006

7394

2007

7515

2008

7757

2009

8040

2010

7892

2011

7931

2012

7969

2013

7955

2014

8041

2015

8154

2016

8124

2017

8096

2018

8238

2019

8371

2020

8658

2021

9207

2022

9962

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