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Assignment:
Can you illustrate/ draw the AD/AS model of the interpretation
Based on the above analysis, we can construct an AD/AS model for the Australian economy as follows: Aggregate demand curve: The AD curve will shift to the right due to increased consumer spending, investment, government spending, and net exports. This shift will lead to an increase in the equilibrium level of output and prices. Aggregate supply curve: The AS curve will shift to the right due to the recovery of output and supply-side adjustments. However, the AS curve may be limited by supply-side constraints such as labor shortages and disruptions to global supply chains. This shift will lead to an increase in the equilibrium level of output and a decrease in the equilibrium price level. Equilibrium point: The intersection of the AD and AS curves determines the equilibrium level of output and prices. Based on the RBA's expectations, the AD curve will shift to the right more than the AS curve, leading to an increase in the equilibrium level of output and prices.
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