Question 8 (6 points) Inflation Solow rate, T growth curve SRAS AD AD AD, AD ADA 3% Real growth Reference: Ref 10-2 Suppose that a negative aggregate demand shock causes the AD curve to shift from AD, to AD3. The Fed implements a policy that shifts AD to ADA. Which of the following is TRUE about the Fed's policy response? a) The Fed responded too little to the shock. O b) The Fed responded too much to the shock. O c) The Fed provided just the right amount of response to the shock. O'd) The Fed ignored the shock