Respuesta :
Real Gross Domestic Product (GDP) is the only outcome of an increase in the money supply over the long term. Price increases will lead to a decline in real Gross Domestic Product (GDP).
In other words, we assert that a rise in the money supply will eventually result in an increase in the level of prices. When there are too many people seeking too few products, inflation results. Given that output is unaffected by changes in the money supply in this example, it is simple to identify this effect. At the point where AD1 and the long-run aggregate supply curve connect, the economy depicted here is in long-run equilibrium. In the short run, real GDP and the price level both increase if aggregate demand rises to AD2. In the short run, real GDP and the price level both fall if aggregate demand falls to AD3.
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