The pandemic of the COVID-19 in 2020 has caused huge economic impacts the world has not seen in many decades. Economic activities and business operations are in great trouble and many countries are experiencing severe economic recession. Governments in these countries, including the Australian government, are offering various types of cash-equivalent disaster-relief money to help people and the troubled businesses.

(a)Given the long run aggregate supply curve (LRAS) and the short run aggregate supply curve (SRAS) in the figure belowas a starting point for your graphical analysis,draw AD curve (AD0)that indicates where thecurrentequilibrium output and price levelare (say, in Australia in December 2020). Brieflyexplainthe reasons why you think so. Assume the supply side factors remain unchanged.