-In the above figure, assume the economy starts out in equilibrium at point d. If the Fed increases the money supply so that the new aggregate demand curve is AD3, then the long-run equilibrium will be at point

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In the long run, an increase in the money supply shifts the aggregate demand curve to the right, moving the economy from point d to point a, where the new aggregate demand curve AD3 intersects the long-run aggregate supply curve.

-In the Above Figure, Assume the Economy Starts Out in Equilibrium