Question 22 [20 marks} Answer each part by using well-labelled graphs for the lS-LM, WSPS and AS-AD models: a} Assume that Australia has experienced a technological progress. Explain how natural rate of unemployment would change as a result of this increase in the level of productivity (A). (5 marks} b} Assume that the REA decided to increase its price target, analyse how the economy would adjust to a medium-run equilibrium. [5 marks) c) Would your answer to (b) change if the economy was in a liquidity trap? Explain. {5 marks) d} Suppose the REA tries to persuade everyone that it is necessary that the Bank to decrease the cash rates. This would decrease people's expectations of future interest rates. Explain what the effect would be today on equilibrium output. [5 marks]