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Read the following article https://www.rba.gov.au/media-releases/2021/mr-21-29.html and answer the following questions: Suppose (not based on the article) that in late 2022 or early inflation starts increasingly
Read the following article https://www.rba.gov.au/media-releases/2021/mr-21-29.html and answer the following questions:
- Suppose (not based on the article) that in late 2022 or early inflation starts increasingly rapidly due to demand pressures in the economy. What type of monetary policy could the RBA use to fight this type of inflationary pressure? Students must explain the relevant monetary policy, and draw the accompanying MD/MS and AD/AS diagram [5 marks].
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