Assume Australia started in a long-run equilibrium. Use an AS-ADdiagram to explain how the mining boom, caused in large part by increased demand from China for our exports, would have affected the economy in the short run.

b) What does it mean to have output above the natural level of output (YN)? Is that even possible? Explain.

c) Surely more GDP is a good thing, right? Explain some of the policy concerns about being above YN.