For This Question,assume Expectations of P and a Are Correct

question 44

Multiple Choice

For this question,assume expectations of P and A are correct.Now suppose that there is a 3% reduction in A.Given this information,which of the following will occur?

• A)The PS relation will shift up by 2%.
• B)The WS relation will shift down by less than 2%.
• C)The WS relation will shift down by 2%.
• D)There will be no change in the real wage.

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Definitions:

Manufacturing Firms

Companies that produce goods using raw materials and various processes and machinery, often involving large-scale production.

Retailers

Businesses that sell goods or commodities directly to consumers, often from physical locations or through online platforms.

Credit Policies

Credit policies refer to the guidelines and standards set by a business regarding the extension of credit to customers, including terms, conditions, and criteria for creditworthiness.

Monthly Rate of Return

The percentage gain or loss on an investment over a one-month period.