One Way to Evaluate Empirically the Impact of the Minimum

question 15

Multiple Choice

One way to evaluate empirically the impact of the minimum wage on employment is to:

• A) appeal to the theory of labour demand, which says that all other factors held constant, an increase in the minimum wage unambiguously reduces employment.
• B) observe and record what happens to the employment of low-wage workers every time there is an increase in the minimum wage.
• C) survey employers in order to ask them whether they laid off employees as a result of the increase in the minimum wage.
• D) compare what happens to the employment of low-wage workers in one sample consisting of firms that were subjected to an increase in the minimum wage to a comparable group of firms that were not.
• E) estimate an equation for aggregate employment that has the aggregate wage as the independent variable.

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Definitions:

Standard of Comparison

A benchmark or criterion used to evaluate the quality or performance of a product, service, or individual.

Equity

The value of shares issued by a company, representing ownership interest, or fairness and impartiality within the context of employment or law.

Benefits

Advantages or perks provided to employees in addition to their salaries, such as health insurance, retirement plans, and paid time off.

Pay Ranges

The spectrum of compensation offered for different roles within an organization, usually determined by job function and experience level.