ltituestlon T. {15 marks} In 2020. the cows1e pandemic resulted in an economic contraction in Australia. Suppose a vaccine was developed in 2021. pushing the Australian economy back to futlemployment {i.e. Australian output will equal potential GDP in 2021 }. Assume that the government's discretionary fiscal policy remains unchanged between 2020 and 2021 despite the economic recovery in 2021. Also assume that the Australian government ran a balanced budget in 2020. (a) How wilt the economic recovery in 2021 affect i} government purchases. ii} transfer payments and iii) tax coliected {if at all)? Briefly justify your answer. [3 marks] (b) What impact will the economic recovery have on the Australian government's budget balance in 2021 (assuming once again discretionary fiscal policy remains unchanged}? Briefly explain your answer. [2 mar \"1 to} Suppose the government is committed to maintaining a balanced budget in 2021 despite the economic recovery. and does so by changing taxation policy. i. Based on your answer to part lb). will the government increase or decrease taxation in order to maintain a balanced budget? [1 mark] ii. Using an appropriate ADAB diagram. illustrate the impact of the governments actions on price levels and real GDP in the short run as well as in the long run, assuming that the Australian economy wiil be at potential GDP in the absence of the changes in discretionary government purchases. Briefly explain the shifts to the short run aggregate supply andfor the aggregate demand curves. (9 marks]