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lAnlncreasernthedomesticpriceIevelwrllcausetheADcurvetoshrtttothelett True or False 2. Aggregate supply shocks (shift of the AS curve) cause the price level and real GDP to move in the same direction. True or False 3. Assume the money-demand curve is MD=105 9 r + Y, the price level depends on r according to the equation P = 65 7' r, and the money supply is M3 = 140. Find a relationship between the price level P and output Y and show that the relation that you have found is an aggregate demand function. Y = - P