3action C: Essay questions (10 METS) Answer ALL questions. Record your amowers in the answer booklet. Read the following excwopt and answer questions What's wrong with deflation? Falls on individual prices to induce spending can be healthy but folls on the majority of prices con howe the opposite effect. If I' know that the cost of a big purchase will potentially be lower over the medium to long- .Deflation increases the real value of debt whit h moons more money is required to cover future loom payments. Zero interest rates provide rapid [1.2. Male] Incentive for a bank to land. Delonon hes bedevilled [i.e. has been a problem in] Europe for a few years, and Japan for many years, so the risk of donation coming to destralie can't be ignored. ........!'a country's iglatlow falls into megathe territory for on extended nia, It can create a vicious cycle, where diminished consumption restrains borrowing and lending. In an economy dealing with defiction, employes resistance to cuts or reductions in their poy (to march price felis) also increases costs for companies. Author: Chris Zappone Source: The Sydney Moming Herald May 31 2016; http:/www.smin com. au business the-economy deflation-whats-co- wrong-with-felling-prices-20160522-gp1921.html?google_editors_picks=true Required: A) What is deflation? (1 mark) B) Based on the article what would be the key comceos of the RBA? (3 marley) () Use the AD A5 framework (including drawing a graph) to describe and explain the situation. (2 marks) D) Explain how the RBA might address the problem of deflation. (4 marks]