According to the Sticky-Price Model, Output Will Be at the Natural

Multiple Choice

According to the sticky-price model, output will be at the natural level if:

A) firms expect a high price level and the demand for goods is high.
B) the proportion of firms with flexible prices equals the proportion of firms with sticky prices.
C) the price level equals the expected price level.
D) expectations are formed adaptively, but not if expectations are formed rationally.