Suppose the NAIRU for Canada Is 6

Multiple Choice

Suppose the NAIRU for Canada is 6.5%,and the actual unemployment rate is 5%.If the Bank of Canada reduces its target for the overnight interest rate,

A) it will move real GDP back toward potential GDP.
B) it will worsen the existing inflationary gap.
C) it will increase the unemployment rate.
D) the AD curve will shift to the left.
E) the AS curve will shift upward.