Suppose 15 Percent Inflation Becomes the Annual Norm

Suppose 15 percent inflation becomes the annual norm. The net effect of this inflation, given rational expectations and staggered, long-term contracts, is

A) a reduction in unemployment below the natural rate as stability in relative prices became part of the inflationary norm.
B) an increase in unemployment above the natural rate as double-digit inflation caused employers to become increasingly nervous about future economic vitality.
C) a convergence of unemployment to the natural rate.
D) any of the above depending on circumstance.
E) cannot tell from the information provided.