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(Figure: Economic Adjustments) Use Figure: Economic Adjustments. Assume that the economy is at point c. The effect of an increase in the money supply is
(Figure: Economic Adjustments) Use Figure: Economic Adjustments. Assume that the economy is at point c. The effect of an increase in the money supply is represented by a shift of the curve to Price level LRAS SRAS2 SRAS1 d C 6 AD2 AD1 G F H Real GDP (per year) SRAS2; SRAS1 AD2; ADI AD1; AD2 SRAS1; SRAS2
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