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

question 60

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:

Transactions

The financial events that affect the financial statements of a business, involving transfers or exchanges of value between two parties.

Current Ratio

An indicator of a business's capacity to meet its obligations due in the next twelve months.

Calculated

Determined by mathematical methods; involving the process of using mathematical or logical techniques to derive a result.

Measure

A method or tool used to quantify or evaluate a variable or quantity.