PRICE LEVEL INTEREST RATE (Percent) it the appropriate curve on the graph to show the impact of an increase in the overall price level on the market for money. Maney Supply Money Demand MONEY (Billions of dollars) Money Dernand Money Supply Following the price level increase, the quantity of money demanded at the initial interest rate of 9% will be supplied by the Fed at this interest rate. As a result, individuals will attempt to bonds and other interest-bearing assets, and bond issuers will realize that they restored in the money market at an interest rate of The following graph plots the aggregate demand curve for this economy. Show the impact of the increase in the price level by moving the point along the curve or shifting the curve Aggregate Demand 40 100 OUTPUT (Billions of dollars) Aggregate Demand than the quantity of money their money holdings. In order to do so, they will interest rates until equilibrium is The change in the interest rate found in the previous task will lead to a in the quantity of output demanded in the economy. in residential and business spending, which cause