(a) Use an AD-AS diagram to explain whether each the following situations cause demandpull or cost-push inflation or both?

(i)Both households and businesses are optimistic about the outlook of domestic

economy after the lifting of Movement Control Order (MCO) and state of emergency. (Malaysia)

(ii)A vaccination program is made compulsory by the government in which all

employers have to bear the full cost of vaccination.

(b) Indonesia's central bank cut interest rates on Thursday to a record low as it stepped up efforts to help the coronavirus-hit economy out of its first recession in over 20 years. (S ource: https://www.theedgemarkets.com/article/indonesia-central-bank-cuts-rates- boost-economy-recession, last accessed on 15^thJan 2021)

Explain how the Bank Indonesia (BI), the central bank of Indonesia, can help in coronavirus-hit economy using monetary policy. Use AD-AS model, illustrate the effects of this policy on the economy.