Q3. Because of COVID-19, Australian economy was influenced heavily. Please discuss how COVID-19 affects aggregate demand and supply respectively, and use the AD and SRAS and LRAS diagram to discuss how COVID-19 affects the equilibrium price and real GDP in Australia.

In the content of the AD, SRAS and LRAS model you just derived earlier, please discuss what policies the government should use to stimulate the economy and its impact in the short and long run. [5+7 marks]