Using Aggregate Demand and Aggregate Supply analysis (including a graph), explain:

(a)how a decrease in global demand for iron ore (which Australia is a large exporter of) could cause a recession in Australia, with output below its long-run equilibrium

(b)how the economy will move back to long-run equilibrium over time without government intervention

(c) how expansionary fiscal policy could be used to move the economy back to long run equilibrium and end the recession sooner

You should use the static AD-AS model (i.e. assume LRAS does not tend to increase over time as the economy grows) and assume that the Australian economy is initially at long-run equilibrium