Q3 The recent monetary policy response in the US to a positive shock Consider the recent monetary policy response in the world's largest economy, the United States. It has become evident that the Federal Reserve is serious about reducing the annual rate of inflation which was 8.2% in September of 2022. Raising the US cash rate quite sharply can be an effective tool at reducing inflation, but this has implications for other advanced economies such as Australia as pointed out in the following articles (listed in chronological order): Pupazzoni, Rachel (2022) 'The Aussie dollar is dropping against the US currency, but it's not all bad news', ABC News, October 5th, available: https: www.abc.netau news 2022-10-05 usd-aud-exchange-rate 101492848 I W, Jeanna (2022) 'lnflation ls unrelenting, Bad News for the Fed and White House', New York Times, October 14th, available: https: www.n times com 2022 10 13 business econorn highrlnflationhtml [Free access, see Reading List on ECONlOOO Blackboard site] 3) Comment on the changes in the Australian dollar as the Reserve Bank of Australia (RBA) has followed suit in raising, albeit not as aggressively as the US, its own cash rate. In your answer, provide some data for both countries of the change in the cash rate and the exchange rate (expressed in AUD terms) for two points in time: lateMarch 2022 and lateOctober 2022. [300 or so words g the suggested amount for Q3a] 6 marks for quality of analysis and use of data Use the multiplier AD model and Phillips curve diagram to illustrate and explain in detail how the aggregate demand function in the US economy is expected to shift in a year from now as the Federal Reserve aims to keep longterm inflationary expectations low. In your answer, elaborate in words (no additional figure required) on the different ways in which US households (more vs. less creditconstrained) are expected to respond to such contractionary monetary policy. [500 or so words is the suggested amount for Q3b] 10 marks for quality of analysis, including linked diagrams Apply key economic concepts taught in Modules L3, L4, L7, L8 in ECONlOOO $2 2022, and refer to key sentences and ideas from the salient articles to support your analysis where relevant