Assume That Expectations of P and a Are Correct

question 10

Multiple Choice

Assume that expectations of P and A are correct. Now suppose that there is a 4% increase in A. Given this
Information, which of the following will occur?

• A) The PS relation will shift up by 4%.
• B) The PS relation will shift up by less than 4%.
• C) The WS relation will shift down by 4%.
• D) The PS relation will shift down by 4%.
• E) The WS relation will shift up by less than 4%.