A. Suppose the following illustrates the values of Australia's nominal GDP and the price level.Calculate the real GDP for each year if the Reserve Bank of Australia (RBA) does not change its current policy to be more contractionary or more expansionary.

Year Nominal GDP Price Level Real GDP

2020 $2.25 trillion 150.0

2021 $2.35 trillion 151.5

B. The potential GDP for 2021 is $1.58 trillion.If the RBA wants to keep its real GDP at its potential level in 2021, should it use a contractionary or expansionary monetary policy?Should it raise or lower its interest rate target? Explain your answer.

C. How should the RBA conduct open market operations to achieve the goal you have described above in part B of this question?