theory of macroeconomics

1. [8 points] In this question you are asked to Use the ISLM model (diagram) and the ADAS diagram to analyze the impact of a rise in Money Supply over time (from SR to LR). Assume that the economy starts in general equilibrium: (GE). 2.. E" Show the impact of a rise in Money Supply over time on the IS-LM and AD-AS diagrams. Along with your diagram provide a detailed intuitive discussion [as done in lecture] of the impact on the whole economy. at] l ' ' movements!!! Provide an intuitive discussion on the impact of the shock in the SR only. Be complete. Now provide an intuitive discussion of the impact of the shock in the LR only (i.e. discuss what happens over time). Hint: price adiustment. Be complete. Use the time diagrams to show the impact of the shock over time on the following 3 variables: Consumption, real money supply, and the Price Level