How the sr and lr differ a In the Lr, prices are flexible and can respond to changes in S or D. In the sr many prices are stuck at some predetermined level a In the Sr, monetary policy does have a potent effect on output and employmentHow the SR and LR Differ ◼ In the LR, prices are flexible and can respond to changes in S or D. In the SR, many prices are stuck at some predetermined level. ◼ In the SR, monetary policy does have a potent effect on output and employment!