Question: 11thank you (a) Based on the AD-AS framework, trace out the likely effects of a decision by the RBA to buy Commonwealth government securities from

11thank you

(a) Based on the AD-AS framework, trace out the likely effects of a decision by the RBA to buy Commonwealth government securities from the public (participants in the nancial market). (8 marks) (b) Assume that a country's nominal GDP was measured at $1500 billion in a year and the volume of money (i.e. M1) circulating in the economy the same year was $400 billion. Using the equation of exchange, determine the velocity of money during the year. (2 marks)

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