The GDP for the Nation of Economia Is Currently Above

Multiple Choice

The GDP for the nation of Economia is currently above potential output. If the adjustment to the long-run equilibrium occurs rapidly, the government of Economia is likely to pursue a policy of

A) decreasing government spending to decrease aggregate demand.
B) decreasing the money supply to decrease aggregate demand.
C) decreasing government spending to increase aggregate demand.
D) taking no action and allowing the economy to adjust naturally.