7.1 Define Monetary Policy and explain its objective on the macroeconomy with reference to theAggregate Demand - Aggregate Supply (AD-AS) model. Explain the difference between passiveand active Monetary Policy with respect to the RBA's policy reaction function. [7 marks]7.2 Using the AD-AS model and the Phillips Curve, describe the impact of COVID-19 on theAustralian economy. By making reference to these minutes, give reasons to justify your answerwith respect to the components of GDP. [7 marks]7.3 Explain how the RBA's decision on Monetary Policy at this meeting will help to cushion theeconomic impacts of COVID-19. Give reasons with reference to the AD-AS and Phillips Curvemodels and the transmission mechanisms of Monetary Policy. [6 marks]Clearly explain each of your answers in the text box below.

Since you have posted multiple questions, as per the policy I have solved the first one for you.…

7.1 Define Monetary Policy and explain its objective on the macroeconomy with reference to the Aggregate Demand-Aggregate Supply (AD-AS) model. Explain the difference between passive and active Monetary Policy with respect to the RBA's policy reaction function. [7 marks]

7.1 Define Monetary Policy and explain its objective on the macroeconomy with reference to the Aggregate Demand-Aggregate Supply (AD-AS) model. Explain the difference between passive and active Monetary Policy with respect to the RBA's policy reaction function. [7 marks]

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

7.1 Define Monetary Policy and explain its objective on the macroeconomy with reference to the
Aggregate Demand - Aggregate Supply (AD-AS) model. Explain the difference between passive
and active Monetary Policy with respect to the RBA's policy reaction function. [7 marks]
7.2 Using the AD-AS model and the Phillips Curve, describe the impact of COVID-19 on the
Australian economy. By making reference to these minutes, give reasons to justify your answer
with respect to the components of GDP. [7 marks]
7.3 Explain how the RBA's decision on Monetary Policy at this meeting will help to cushion the
economic impacts of COVID-19. Give reasons with reference to the AD-AS and Phillips Curve
models and the transmission mechanisms of Monetary Policy. [6 marks]
Clearly explain each of your answers in the text box below.

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