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 slowly, the government of Economia is most likely to pursue a policy of

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