-In the above figure, assume the economy starts out in equilibrium at point d. If the Fed increases the money supply so that the new aggregate demand curve is AD₃, then the long-run equilibrium will be at point

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In the long run, an increase in the money supply shifts the aggregate demand curve to the right, moving the economy from point d to point a, where the new aggregate demand curve AD₃ intersects the long-run aggregate supply curve.

-In the Above Figure, Assume the Economy Starts Out in Equilibrium