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.

Natural Rate

Refers to the long-term unemployment rate or interest rate that is observed once the effect of short-term cyclical factors has been removed.

Aggregate Demand

The entirety of demand for goods and services in an economic setting, pegged at an established price level and during a defined time.

Unemployment Rate

The percentage of the workforce currently without jobs and actively searching for employment.