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(a) With the help of an aggregate demand and aggregate supply (AD-AS) diagram, explain the mechanism of a successful fiscal policy when there is an

(a) With the help of an aggregate demand and aggregate supply (AD-AS) diagram, explain the mechanism of a successful fiscal policy when there is an inflationary gap.(5 marks)

(b) With the help of appropriate diagrams, explain the monetary policy transmission conducted by the Reserve Bank when inflation is low and output gap is negative.(5 marks)

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