Starting from long-run equilibrium at A with output equal to and the price level equal to P1, if there is an unexpected monetary contraction that shifts aggregate demand from AD1 to AD3, then the long-run neutrality of money is represented by the movement from:
Aggregate demand curve shifts to left when there is reduction in demanding. It is caused by decline in consumer spending. The equilibrium price level will tend to be affected by this movement of demand curve.
