Unit 2: Monetary policy in action in Australia

A good clip and article from the BBC showing monetary policy in action

http://news.bbc.co.uk/1/hi/business/8604281.stm article
http://news.bbc.co.uk/1/hi/world/americas/8604224.stm video

a) Using information from the video and article and your economic knowledge, explain, using an AD/AS diagram, how increasing interest rates should reduce inflation in Australia