With Sticky Prices, in the Stylized DSGE Model, a Monetary

Multiple Choice

With sticky prices, in the stylized DSGE model, a monetary contraction ________, which ________.

A) raises inflationary expectations; pushes the Phillips curve up
B) lowers inflationary expectations; expands labor supply
C) decreases aggregate demand; decreases labor demand
D) raises taxes; reduces labor demand
E) represents a fiscal expansion; pushes up labor demand