The analysis on the impact of Covid-19 has largely focused on the demand side with little attention on the supply side. Lock down policies around the world unexpectedly constraint production, causing disruptions in the global supply chain. This has resulted in a decrease in the availability, as well as increase in the price of intermediary goods, which has a particular impact on small open economies such like Australia. Using AS-AD model, analyse how the Australian economy would adjust to the new medium equilibrium following this disruption of the supply chain. (10 marks) [Hint: raising cost of intermediary goods can be interpreted the same as raising market or raising wages]