Question 6 Not yet answered Marked out of 5.00 W Flag question 6.1 Governments play an important role in maintaining policies that support businesses. Entering into trade agreements with other governments, negotiating better terms of trade, framing favourable trade policies etc can all come under what economists call Supply side fiscal policy. Use the AD-AS model below to explain how successful government policies such as the above-mentioned affect Australian businesses and the country's GDP/economy. CPI 150 140 130 120 110 100 0 700 800 900 1000 GDP($000) Your answer should consider the following Comment on the influence this may have on the direction that AD and/or AS curves will shift and why. Indicate what the new GDP, CPI may be, based on data in the given model. Contrast the effect on inflation compared to Demand-side fiscal policy. (5 marks) Question 7 Not yet answered Marked out of 8.00 \\'0 Flag question 7.1 a) During COVID-19 the Australian government increased Job-Seeker payments to those who lost jobs, implemented JobKeeper to keep workers on companies' payroll, issued vouchers to encourage spending at eateries and entertainment places. Discuss the kind of Demand-side fiscal policy that the Australian government implemented. Your discussion should incorporate the following for which marks will be awarded. 1. Who is the manager of Australia's Fiscal policy. 2. An gplanation of why you think the manager operated a Budget deficit or surplus. 3. If it will be an Expansionary or Contractionary policy. 4. Which and how item/s in the model 'GDP = C + I + G + X M' will be affected. 5. How the Spending multiplier will operate in this situation. (5 marks) b) Refer to the AD-AS model shown. You do not need to draw on the diagram or to submit it, but you should 1. describe the shifts of the AD or AS curves and 2. use the data to indicate what is the new CPI and GDP if the kind of Demand-side fiscal policy in your answer to part (a) is implemented. CPI 160 150 140 130 120 110 o 1000 1100 1200 1300 GDP (5000)