10)Initially, an economy is inlong-run equilibrium with a real GDPof$4 trillion.

Suppose that the productive capacity of the economy increasesby 50% and at thesame time, the money supply increases at the same rate.

1.)Using the line drawing tool (possiblytwice),show the effect on the economy. Properly label your new line.

2.)Using the point drawingtool,show the new equilibrium price level and output. Label thepointE2.

220 200- LRAS 180- 160- 140- Price Level 120- 80- 60- 40- AD N- 6 8 10 Real GDP per year ($ trillions)