Question: Panel (a) Panel (b) SRAS Price level Price level SRAS P1 P2 P 2 .. . . . . ... AD on P1 AD2 AD2

Panel (a) Panel (b) SRAS Price level Price level SRAS P1 P2 P 2 .. . . . . ... AD on P1 AD2 AD2 AD Y1 Y2 Real GDP Y2 Y, Real GDP (per year) (per year) Reference: Ref 15-4 Figure: The Money Supply and Aggregate Demand Above is two possible AD/AS diagrams. The Panel shows the outcome of the indirect effect of a change in when the Bank of Canada buys bonds

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