In the Summer of 2009, the United States Federal Minimum

question 122

Multiple Choice

In the summer of 2009, the United States federal minimum wage was raised to $7.25. According to theory, what will likely be the result of an increase in minimum wage?

• A) Some workers will leave the labor market.
• B) Firms will hire more workers.
• C) All workers prior to the wage increase will now earn at least the minimum wage.
• D) Unemployment will increase as firms lay off workers.

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Definitions:

Financial Statements

Reports that summarize the financial performance and health of a business including balance sheet, income statement, and cash flow statement.

Balance Sheet

A summary record that outlines a firm's assets, liabilities, and equity held by shareholders at a specific timeframe, showing its financial status.

Statement of Owner's Equity

A financial statement that outlines the changes in the equity of a company over a specific period, including contributions, withdrawals, and the net income or loss.

Worksheet

An accounting tool used for planning and preparing financial statements, allowing accountants to adjust and update figures through a series of adjustments.