-Refer to the above figure. Unexpected expansionary monetary policy has caused the aggregate demand curve to shift to AD₂. In the long run

Name: -Refer to the above figure. Unexpected expansionary monetary policy has caused the aggregate demand curve to shift to AD₂. In the long run
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In the long run, the economy returns to its potential output level (Y₁) due to adjustments in wages and prices, but the price level will be higher than P₂ due to the initial increase in aggregate demand.

-Refer to the Above Figure