All Points on the SP Curve (But Not on the LP

question 123

Multiple Choice

All points on the SP curve (but not on the LP line) share the characteristic that the economy is not in the long-run equilibrium because

• A)price level is constantly increasing faster than nominal wage rate.
• B)wage contracts failed to anticipate inflation correctly.
• C)wage contracts failed to specify in advance the wage increases necessary to keep up with inflation.
• D)All of the above.