With reference to the IS curve, describe the likely effffects on Australian output in the

short run in each of the following circumstances. Describe what happens to the IS

curve and provide brief explanations. (3 points each)

a) In the middle of a severe global pandemic it is announced that an effffective

vaccine has been developed against the pathogen and is going to hit the market

in the near future.

b) After a major environmental disaster in the Western Australian gas fifields, a

court orders the resource company to clean up and reverse the environmental

damage.

c) Assuming that Australian households are heavily invested in Bitcoin and other

cryptocurrencies, governments worldwide are announcing that they will ban the

use of cryptocurrencies (like the Chinese government recently).

d) The (Australian) government unexpectedly cancels an existing contract to im

port $90 billion worth of French submarines, to be delivered in 2030, and instead

enters a new contract to import $120 billion worth of US submarines, to be de

livered in 2040.

e) To the surprise of everyone, the RBA is lifting the cash rate by 50 basis points.

It argues that this is in response to unexpectedly favourable economic conditions

coming out of the Covid-19 slump