Consider the following long-run model of an economy. Output is produced according to the production function given by where A=4, K=216 and L=1000. Aggregate demand is given by where k = 0.25 and M = 1500. Suppose that an adverse supply shock causes the price level to double. If the Central Bank wants to accommodate this shock , then it must Question 2 options: increase the money supply by 800, causing the price level to be permanently higher at its current level. decrease the money supply to reduce aggregate demand. keep the money supply constant. increase the money supply by 1500, causing the price level to be permanently higher at its current level