Macroeconomics topic

With inflation rising here, and around the world..." "interest rates are at their lowest levels in 5,000 years and households have borrowed like there is no tomorrow, just to get a foothold into the market."

"Australians now own $9 trillion worth of real estate. And the nation has whacked on an extra trillion in just the past five months. But the debt is skewed to relatively new property entrants, younger Australians who are crucial to keeping the economy going.They're the ones deep in debt.""Central banks may no longer have the capacity to raise interest rates to anywhere near the levels required to slow an inflationary spike. Doing so could send a large number of households, many of which are leveraged to the eyeballs, ...to the wall. And that would cause the economy to tank."

If the above quote is correct, clearly explain the likely impacts on the Australian macroeconomy if the RBA were to raise interest rates significantly . Use the AD-AS framework to explain your answer. Clearly explain the effect of such a policy on the major macroeconomic variables.

Use monetary policy when drawing diagram AD AS and explain impact of monetary policy when raising interest rate.