In the short term, prices are sticky, that is, the price level cannot change so quickly. That is to say, in the short-term research, assuming that prices remain unchanged, it is mainly to explain what factors affect the short-term fluctuation of the economy besides prices. Therefore, according to liquidity preference theory, money supply is determined by the central bank, so it is a vertical line, and money demand is determined by income and interest rate, which is a line inclined to the lower right, so these two lines constitute the liquidity preference theory, with the horizontal axis representing income and the vertical axis representing interest rate, so the supply and demand of money can cause changes in interest rates, and adjusting interest rates can also affect supply and demand, such as the three magic weapons of the central bank: deposit reserve ratio, rediscount rate and open market business. In the long run, prices change, and output is determined by labor and technology, so output is fixed. Similarly, the supply of money is equivalent to output, and demand is equivalent to income, so it constitutes a vertical line, that is, a long-term supply line. Aggregate demand curve is a line inclined to the lower right, so they affect the price level. Adjusting demand and supply can also affect the price level. Interest rate regulates the loanable funds market, because higher interest rates can reduce the number of loans, on the contrary, increase the number of loans, so interest rates can mediate the deposit and loan market.