The Imperfect-Information Model of the Lucas Aggregate Supply Curve Assumes

Multiple Choice

The imperfect-information model of the Lucas aggregate supply curve assumes that

A) firms cannot be sure whether higher prices are caused by higher demand or simply reflect an increase in the overall price level
B) outsiders have imperfect information and only insiders can take part in wage negotiations
C) in an imperfectly competitive environment even small menu costs will deter firms from changing their prices
D) even under imperfect information, firms make optimal decisions, so the full-employment level of output is always maintained
E) all of the above