5. Briefly summarize the long Figure 4-7.4 Expansionary Monetary Policy LAAS SRAS PRICE LEVEL AD REAL GDP 10 51 6. Suppose that initially the economy is at the intersection of AD and SRAS as shown in Figure 4-7.4. Now, the Fed decides to implement expansionary monetary policy to increase the level of employment. (A) In the short run, what happens to real output? Explain why. (B) In the short run, what happens to the price level? Explain why 152 Advanced Placement Economics Macroeconomics: Student Resource Manual O Council for Economic Education, No