Assume That People Have Rational Expectations and Wages Are Fixed

Assume that people have rational expectations and wages are fixed by long-term contracts.If prices of goods can change fairly quickly, we should still expect that

A) random shocks will not significantly affect the level of output
B) labor markets will be in equilibrium longer than goods markets
C) firms will not supply more output after a price increase
D) unanticipated monetary policy changes will affect the level of real output in the short run
E) none of the above

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