Please answer the following questions. The three questions are not connected.

(a) In the press release of the Hong Kong Census and Statistics Department on the statistics of Retail Sales in Hong Kong for January 20221 , it stated that, "Local consumer spending normally attains a seasonal high before the [Lunar New Year] Festival. As the Lunar New Year fell on February 1 this year but on February 12 last year, the year-on-year comparison of the figures for January 2022 with those for January 2021 might have been affected by this factor to a certain extent." Explain why and how it would be affected . (3 marks)

(b) When does a continuous optimism towards future production and income by investors and consumers become self-fulfilling and lead to a prolonged high economic growth? Explain using the AD-AS model introduced in this course. Please answer with appropriate diagrams. (4 marks)

(c) From 2021, disruption in supply chain and increasing oil price have brought about high inflation and slower recovery of GDP growth rate from the pandemic for many economies. The recent war in Ukraine and sanctions against Russia is likely to prolong this problem and worsen the situation. Using the AD-AS model you have learned in this course, explain the situation. Also, discuss what kinds of government macroeconomic policy are appropriate to improve the situation, or if there is a dilemma. Please answer with appropriate diagrams.