In the monetarist version of the AD-AS framework,an increase in the money supply produces a __________ shift of the __________ curve.

Question

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According to monetarist views, an increase in the money supply shifts the aggregate demand (AD) curve to the right. This is because an increase in the money supply leads to lower interest rates, which stimulates spending by households and firms, leading to an increase in aggregate demand. The shift in AD results in higher output and prices in the short run.

In the Monetarist Version of the AD-AS Framework,an Increase in the Money