refer to the following extract from the Reserve Bank of Australia (RBA) Statement issued on the 19th of March 2024. "Inflation continues to moderate but remains high. Recent information suggests that inflation continues to moderate, in line with the RBA's latest forecasts. The headline monthly CPI indicator was steady at 3.4 per cent over the year to January, with momentum easing over recent months, driven by moderating goods inflation. Services inflation remains elevated, and is moderating at a more gradual pace. The data are consistent with continuing excess demand in the economy and strong domestic cost pressures, both for labour and non-labour inputs" Statement by the Reserve Bank Board: Monetary Policy Decision 19th March 2024 https://www.rba.gov.au/media-releases/2024/mr-24-05.html Also, refer to the consumer price data on https://www.rba.gov.au/inflation/measures-cpi.html This data is downloaded and attached as an Excel file too. Consider that you are an Economic Adviser to the policymakers, and you are asked to prepare a short analysis of the current economic situation in Australia by addressing the following questions/issues: 1. According to the above RBA statement 'Recent information suggests that inflation in Australia continues to moderate.' Explain this statement using the provided data. Incorporate relevant illustrations such as graphs to substantiate your answer. Explain the macroeconomic reasoning behind the observed trend in recent Australian inflation. Based on your analysis, assess whether Australia is currently experiencing an inflationary gap or a recessionary gap. Justify your answer. (approx. 250 words)

2 2. Over the past several months, the RBA's Australian monetary policy has been focused on maintaining a high-interest rate. Explain the intended effect of this policy and illustrate your explanation with an appropriate macroeconomic model with a graphical analysis. (approx. 500 words) 3. Although interest rate-based monetary policies play a role in managing inflation and economic growth, the impact of monetary policy isn't uniformly distributed across all sectors of the economy. Describe the factors that could impede the effectiveness of the enacted monetary policies in Australia in the recent past. Undertake research to answer this part of the assignment (approx. 1000 words) 4. How can fiscal policy be used to address the impediments/challenges that you have discussed in Part 3 above (about monetary policy)? (approx. 750 words)