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Based on the news article, identify the effect of the policy undertaken by the Reserve Bank of Australia. Starting from a long-run equilibrium, use the
Based on the news article, identify the effect of the policy undertaken by the Reserve Bank of Australia. Starting from a long-run equilibrium, use the dynamic aggregate demand and aggregate supply model to show what happens in both the long run and the short run as a result of this policy. Tip: Discuss the over-prediction and under-prediction scenarios of this policy effect
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