How is the effect of expansionary monetary policy depicted in an aggregate supply-aggregate demand graph?

Question

Quizplus · Accepted Answer

Expansionary monetary policy, such as decreasing interest rates, increases the money supply and encourages consumer spending, leading to an increase in aggregate demand. This is depicted as a rightward shift in the aggregate demand curve. This shift results in an increase in the equilibrium level of income and output, but may also lead to inflationary pressures if the economy is already at full employment. The aggregate supply curve does not shift in response to expansionary monetary policy.

How Is the Effect of Expansionary Monetary Policy Depicted in an Aggregate