Suppose Nominal Wages Are Sticky in the Downward Direction

Multiple Choice

Suppose nominal wages are sticky in the downward direction.If no government intervention occurs, how may unemployment be affected in the long run?  

A)  Unemployment may persist for long periods of time. 
B)  Shortages of labour may persist for long periods of time. 
C)  Increases in real wages will occur too quickly to affect unemployment. 
D)  Nominal wage increases will help reduce unemployment.