(a) Why does the RBA have a policy objective to keep inflation between 2-3%? Hint: What are the costs of inflation, both anticipated and unanticipated, and are there any problems with inflation being very low? (6 marks) (b) The annual inflation rate in Australia has been below 2% for almost the whole period since 201 5, hitting 3.8% and exceeding the RBA's target range for the first time in June quarter 2021 At the same time, the unemployment rate was steadily declining from around 60/0 in 2015 to 5.10/0 in February 2020. How does this fit with the Short Run Phillips Curve and the expected trade-off between inflation and unemployment? What might have happened to the Short Run Phillips Curve over this period? (4 marks)