Assume That Expectations of P and a Are Correct

Multiple Choice

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

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