An economy is in long-run equilibrium when a positive demand shock causes demand-pull inflation. Describe the policy response of the Federal Reserve. a. A positive demand shock will lead to (Click to select) in the aggregate demand curve. The short-run equilibrium will result in a (Click to select) A price level and an (Click to select) A level of real GDP. b. In order to control inflation, the Federal Reserve will enact (Click to select) monetary policy. A (Click to select) level of investment demand should be targeted by (Click to select) interest rates in the economy. c. To change interest rates in the appropriate direction, the Federal Reserve should target a (Click to select) money (Click to select) . An economy is in long-run equilibrium when a positive demand shock causes demand-pull inflation. Describe the policy response of the Federal Reserve. a. A positive demand shock will lead to (Click to select) in the aggregate demand curve. The short-run equilibrium will result in a (Click to select) A price level and an (Click to select) A level of real GDP. b. In order to control inflation, the Federal Reserve will enact (Click to select) monetary policy. A (Click to select) level of investment demand should be targeted by (Click to select) interest rates in the economy. c. To change interest rates in the appropriate direction, the Federal Reserve should target a (Click to select) money (Click to select)