Problem
In the diagram, use aggregate demand and long-run aggregate supply curves to show an economy at a long-run equilibrium at its potential output of $10 trillion and a price level of P = 120. Illustrate the effects if firms and workers do not believe that the Fed will maintain a price level of 120 but the Fed does not increase the money supply as expected.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.