Using the dynamic aggregate demand and aggregate supply model, illustrate and explain the impact of following policy decisions on income, unemployment, and inflation in Australia in both short-run and long-run:

The Reserve Bank of Australia (RBA) is closely monitoring the high inflationary pressure due to a surge in demand in the post-COVID situation and contemplating a suitable policy action. Explain and illustrate what policy stance should the RBA take and how would that remedy the problem.