urgent Suppose that the central government started more liberalized spending to stimulate the economy after lockdown; a) If the RBI does not respond to this event, what will happen to the price level?...

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Extracted text: urgent Suppose that the central government started more liberalized spending to stimulate the economy after lockdown; a) If the RBI does not respond to this event, what will happen to the price level? b) How does this event affect the demand/supply of money? Explain using a graph. c) If the RBI wants to keep the price level stable, what should it do? d) Graphically explain (Using AS and AD) the overall impact of this activity on the economy