If Fiscal Policy Makers Increase Aggregate Demand in an Attempt

Multiple Choice

If fiscal policy makers increase aggregate demand in an attempt to decrease the unemployment rate below the natural rate of unemployment,then:

A) the potential GDP will decrease.
B) the potential GDP will increase.
C) the only lasting impact of the policy is a higher price level.
D) the only lasting impact of the policy is higher real GDP.
E) the only lasting impact of the policy is lower real GDP.