The Fact That Nominal Wages Are Fixed by a Contract

Multiple Choice

The fact that nominal wages are fixed by a contract at the beginning of a period while prices of goods may change within that period, implies that

A) unanticipated changes in the money supply do not affect the level of output
B) there is no trade-off between unemployment and inflation
C) firms want to supply more output when prices increase since the real wage rate is lower
D) anticipated monetary policy changes will not affect the level of inflation
E) money supply changes affect prices but not unemployment in the short run