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%.

Question

Quizplus · Accepted Answer

The PS relation will shift up by 4% because an increase in A will lead to an increase in P.

Assume That Expectations of P and a Are Correct