## Answers

LRAS LRAS SRAS SRAS 120 120 110 Price Level (base year = 100) Price Level (base year = 100) 110 E 100 E 100 AD E. 90 90 AD 1 AD AD 80 400 80 400 500 600 700 800 500 600 700 800 Real Output (constant dollars) Real Output (constant dollars)

Contractionary monetary policy Expansionary monetary policy E Eo EL D S₂ S. S 1 0 2 4 6 8 10 12 14 16

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