He told the dog to lay down.
'lie' is present tense 'lay' is past tense so in this context 'lay' is incorrect
I'm gonna go "lay" down, that sounds present tense to me, I'm gonna go "lie" down does also
lay is a transitive verb meaning put or place eg Lay the book on the desk.
lay, laid, laid
lie is intransitive meaning recline or situate eg. I'm going to lie down.
lie, lay, lain
It would be wrong if by using that sentence we intend saying "sit down" (instead of lay down)
the answer is A