Now read the latest monetary policy decision statement by the Reserve Bank of Australia Governor, Mr. Philip Lowe. https://www.rba.gov.au/media-releases/2021/mr-21-29.html

Using the static Aggregate Demand - Aggregate Supply model discussed in the unit, illustrate and explain how there could be inflationary pressure in the economy? What will the RBA do to ease such inflationary pressure? Link your explanation with the diagram drawn.