Answer 2. Recall, when Y < Y_n, the unemployment rate is above the natural rate of unemployment and there is pressure on wages to fall. This leads to a shift of the AS curve to the right until Y = Y_n. Therefore, the price level falls and output rises if the government does nothing. Click on the Do nothing button to see this in action. If this is not clear, go to the active graph The medium run effect of an increase in money growth. Click on the Reset button to reset the figure.