The Reserve Bank of Australia (RBA) IS committed to doing what it can to support jobs, incomes, anc businesses in Australia. The Reserve Bank of Australia reduced the official cash rate couble of times during the pandemic in 2020-21 to boost the economy. These RBA decisions to reduce interest rates have impacted manv sectors including the housing sector in Australia.

Reauired:

Ouestion:1

suppose the nousine sector in Australia is a perrectiv competitive market.

Draw a diagram of a perfectly competitive firm making short-run economic losses during covid 19 pandemic situation. Explain your answer.

Question:2

Explain the impact of interest rate reduction in the housing sector. Draw diagrams to shov the transition from a short run to a long run in a perfectly competitive market.