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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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