Unit 3: Rising interest rates and the effect on the Australian economy

From Geoff Riley's blog comes this economics packed summary of the Australian economy and their use of interest rates

http://www.tutor2u.net/blog/index.php/economics/comments/australian-interest-rates/#extended

The BBC also has an article

http://news.bbc.co.uk/1/hi/business/7228153.stm

a) Using an AD/AS diagram, explain the current position of the Australian economy
b) Using an AD/AS diagram, explain the effect on the economy that the monetary authorities hope these interest rates will have
c) What factors will determine whether these interest rate rises will have the desired effect?