d 90 80 70 60 -t 4 5 AD 6 7 8 9 10 QUANTITY OF OUTPUT (Trillions of dollars) 11 12 LKAS In the short run, the expansionary monetary policy will result in a price level of On the previous graph show the long-run effect of the expansionary monetary policy by shifting the appropriate curve or curves. Because the wages workers agreed upon at the beginning of the year now buy renegotiate wages, assuming a price level of than had been expected in real terms, workers eventually Suppose next year, the Fed once again announces that its monetary policy is aimed at maintaining price stability at the level reached last year (the price level you found in the previous question) and output at potential output ($8 trillion). However, because the government reneged on its promise last year, workers and firms suspect that the Fed will again shift to an expansionary policy. As a result, in anticipation of the Fed's actions, wage rates and resource prices are negotiated in the expectation of inflation in the current year. Which