In the monetarist version of the AD-AS framework,starting from long-run equilibrium,an increase in the money supply produces

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In the monetarist version of the AD-AS framework, an increase in the money supply leads to lower interest rates, which in turn stimulates investment and consumption in the short run, leading to a rise in Real GDP. However, in the long run, prices and wages adjust to the increased money supply, leading to higher nominal wages and prices, but no change in Real GDP. Therefore, in the short run, Real GDP rises, but in the long run, it returns to the same level as before the increase in money supply.

In the Monetarist Version of the AD-AS Framework,starting from Long-Run