,draw the impact of each event on the AD-AS figure where the medium run equilibrium, EMR, equals the short run equilibrium (where AD intersects SRAS). Then circle whether inflation increased or decreased, and whether GDP increased or decreased. 1. An increase in the money supply. Inflation p MRAS SRAS EMR yf Full employment AD-AD y/GDP Inflations Increased Decreased GDP: Increased Decreased 2. An increase in the cost of raw materials. SRAS MRAS SRAS Inflation p EMR yf Full employment AD y/GDP Inflation Increased) / Decreased GDP: Increased / Decreased