[Please note that you need to complete drawing the AD-AS diagram on your own piece of paper as you explain your answers for both part (a) and part (b) of this question. Take a photo-shot (or screenshot) of the completed diagram ONLY and upload it in the uploading section following this question.

The pandemic of the COVID-19 in 2020 has caused huge economic impacts the world has not seen in many decades. Economic activities and business operations are in great trouble and many countries are experiencing severe economic recession. Governments in these countries, including the Australian government, are offering various types of cash-equivalent disaster-relief money to help people and troubled businesses.

(a)Given the long-run aggregate supply curve (LRAS) and the short-run aggregate supply curve (SRAS) in the figure below as a starting point for your graphical analysis, draw an AD curve (AD0) that indicates where the current equilibrium output and price level are (say, in Australia in December 2020). Briefly explain the reasons why you think so. Assume the supply side factors remain unchanged.(5 marks)

(b)Analyse and discuss how such disaster-relief money passed directly to people would contribute to restoring the economy back to normal. In your discussion, include the analysis on how it would affect the expenditure components and the key macroeconomic variables (C, I & G) as well as the job market. Provide the reasons for each process.Use the AD-AS diagram given in (a) for your explanation and draw further as you explain the process. Assume the monetary policy and everything else remain unchanged.