Answer Happy

Question 1 Using the dynamic aggregate demand and aggregate supply model, illustrate and explain the impact of following policy decisions on income, unemployment and inflation in Australia in both short-run and long-run. Part (a) Due to the ongoing Omicron variant induced COVID-19 pandemic, the government is reducing the time gap for taking the booster shot for people inoculated with two doses of COVID-19 vaccine. Part (b) The building and construction industry in Australia is suffering from some logistical issues with imported construction materials as a fallout of the COVID-19 pandemic. The Reserve Bank of Australia (RBA) is closely watching the situation and contemplating a suitable policy action. Explain and illustrate what policy stance should the RBA take and how would that remedy the problem. (15 + 15 = 30 marks]