In order to reduce the size of its deficit, the government of Oz widely announces that it is considering introducing a large decrease in government expenditures next year. A substantial amount of opposition arises that claims such a move will cause a recession in Oz.
You work for a corporation that is considering whether or not it should expand production. The economic viability of the plant expansion depends on there being no recession in the near future. Your boss asks you to comment on the validity of the claim made by those opposing the planned decrease in government expenditures. What do you tell her?
Use appropriate well-labelled diagram(s) as an aid to presenting your report. Make clear any assumptions you make and discuss the implications of these assumptions.