In the Medium Run the Aggregate Supply Curve Is Upward

Multiple Choice

In the medium run the aggregate supply curve is upward sloping since

A) workers immediately realize that nominal wage increases are really the result of price increases
B) firms encounter costs in resetting prices and are reluctant to change wages following a change in aggregate demand
C) wages and prices always immediately change in proportion to the money stock
D) there is always natural friction in the labor market that prevents unemployment from reaching zero
E) none of the above