Each of the Three Models of Short-Run Aggregate Supply Is

Multiple Choice

Each of the three models of short-run aggregate supply is based on some market imperfection.In the sticky-price model,the imperfection is that:

A) some firms do not adjust their prices instantly to changes in demand.
B) contracts and arrangements may prevent nominal wages from adjusting rapidly to changing economic conditions.
C) firms confuse changes in the overall level of prices with changes in relative prices.
D) the real wage adjusts to bring labour supply and labour demand into equilibrium.