-The Economy Is at the Equilibrium Shown as Point a in the Above

Multiple Choice

-The economy is at the equilibrium shown as point a in the above figure.To restore the economy to potential GDP, the Fed should

A) buy government securities and thereby increase aggregate demand.
B) sell government securities and thereby increase aggregate demand.
C) sell government securities and thereby decrease aggregate demand.
D) buy government securities and thereby decrease aggregate demand.
E) buy government securities and thereby increase aggregate supply.