Final answer:
A leftward shift in aggregate demand leads to a decreased real GDP and substantial unemployment, with no change in the price level. Thus, a reduction in 'm' will result in a reduction in Yn and an increase in unemployment.
Step-by-step explanation:
When aggregate demand shifts to the left, it signifies that the total amount of goods and services demanded at all price levels has decreased. This typically results in a decreased real GDP as the economy adjusts to the lower level of demand. There is no corresponding decrease in the price level in this scenario.
At the new equilibrium point Y1, which is below the potential GDP (Yp), the economy finds itself in a situation with substantial unemployment. This happens because the quantity of labor demanded at the original wage rate is lower than before the demand shift.
This will lead to a reduction in natural level of employment, implying that a reduction in 'm' (which in some economic contexts could represent a component of money supply or a parameter influencing aggregate demand) will result in a 'reduction in Yn' (which seems to represent the natural level of output or income in this context), and thereby, an increase in unemployment.