   Initial 
equilibrium

Short run effects

Long run effects

Short run equilibrium

Long run equilibrium

LRAS

AD²

AD¹

1. Money supply 
increase by 10%

2. Price level 
increase by 10%

SRAS²

SRAS¹

Output, Y

Price level, P

P₁

P₂

Long Run Monetary Neutrality
  in the AS-AD Framework

Y₁

Y₂

A = Point(yAxis)
B = Point(xAxis)
a = Segment(A, B)
C = Point(yAxis)
b = Segment(A, C)
D = Point(b)
E = (6, 3)
c = Segment(D, E)
F = Point(b)
G = (6, 4)
d = Segment(F, G)
f = If(1.3 < x < 5.5, 7 * x^(-0.8))
H = Intersect(f, c, (2.8838388071248184, 2.999999999384896))
I: (x(H), 4)
J: (x(H), 0)
K: (x(H), 7)
e = Segment(J, K)
g = If(1.5 < x < 6, 4 / x(I)^(-0.8) * x^(-0.8))
L = Point(c)
h = false
i = true
M = Point(f)
N = Point(g)
u = Vector(M, N)
O = Point(c)
P = Point(d)
v = Vector(O, P)
Q: (x(L), 0)
j = Segment(L, Q)