In the Static AD-AS Model, What Is the Most Likely

Multiple Choice

In the static AD-AS model, what is the most likely long-run outcome of an oil price increase, if no policy change is implemented?

A) real wages will decline while the levels of output and prices will remain unchanged
B) the level of prices will increase while the level of output will remain unchanged
C) the natural unemployment rate and the price level will both increase
D) nominal wages and prices will increase, but real wages will remain unchanged
E) real money balances and real wages will decline while nominal wages will remain unchanged