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Figure: Classical Model of the Price Level
-(Figure: Classical Model of the Price Level) Look at the figure Classical Model of the Price Level. If the central bank increases the money supply such that aggregate demand shifts from AD₁ to AD₂, according to this classical model, the SRAS will:

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Figure: Classical Model of the Price Level

-(Figure: Classical Model of the Price Level) Look at the figure Classical Model of the Price Level. If the central bank increases the money supply such that aggregate demand shifts from AD₁ to AD₂, according to this classical model, the SRAS will:

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According to the classical model, the short-run aggregate supply (SRAS) is vertical at potential output, which means it does not depend on the level of aggregate demand. Therefore, if aggregate demand shifts, the SRAS will remain the same.

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