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Question 3 (Marks: 25) Q.3.1 The monetary transmission mechanism can be depicted in the form of a graph (10) or using symbols. Explain, with the
Question 3 (Marks: 25) Q.3.1 The monetary transmission mechanism can be depicted in the form of a graph (10) or using symbols. Explain, with the aid of symbols, the monetary transmission mechanism when interest rates increase (Note: Prices and wages are variable.) Q.3.2 Explain, using the AD-AS model, how the South African Government can use (15) fiscal policy as a tool to recover from the negative effects of this COVID-19 pandemic. Your answer must include the following: . The description of the type of fiscal policy required; (4) . An explanation of how the implementation of this tool will work their way through the economy to achieve the desired effect; (6) The AD-AS graph showing the implications of your recommendations. (5) Marks will be awarded for your ability to integrate theory with the scenario provided
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