Use the ISLM diagram to graphically analyze the short-run and longrun effects of an increase in the money supply. State what happens to national income (Y), the interest rate (r), the price level (P), consumption (C), investment (I), and real money balances (M/P) in the short run and in the long run. Interest rate 1'1 Y* Y Income, output Short run Long run Income (Y) Price level (P) Interest rate (1') Consumption (C)