a)As estimated by the RBA, the natural rate of unemployment of Australia is around 5%. Basing on Australian data, explain whether the Australian economy has experienced any significant output gaps before and after the arrival of the COVID19 pandemic. (8marks, word limit = 250) Note: you must include the source of your data in the answer. b)Discuss the changes in theAustraliangeneral price level and real GDP between June 2019 and June 2020.With an appropriate AD-AS diagram, explain whether sucha phenomenon was caused by a shift in aggregate demand or aggregate supply. (8marks, word limit = 250) c)Suppose the RBAcounteracted theabove-mentioned economic downturnbyan appropriatemonetary policy. Withdiagram(s), discuss the effect of such a policy on the short-run equilibrium output (8marks, word limit = 300) d)Without the policy in part (c), explain withan appropriate diagramwhy the economy can automatically returnto full employmentin thelong-run.
