An increase in the money supply leads to a shift in AD in the _____ run and AS in the _____ run.

Name: An increase in the money supply leads to a shift in AD in the _____ run and AS in the _____ run.
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Question

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An increase in the money supply initially shifts the Aggregate Demand (AD) curve to the right in the short run as more money in the economy boosts spending. Over the long run, it can lead to inflationary pressures, which can shift the Aggregate Supply (AS) curve as costs of production adjust.

An Increase in the Money Supply Leads to a Shift