The General Equilibrium Analysis of a Minimum Wage Applied to Only

question 95

Multiple Choice

The general equilibrium analysis of a minimum wage applied to only some sectors of the economy suggests that

• A) workers in all sectors will face increased wages.
• B) some workers in the covered sectors will lose their jobs and remain unemployed.
• C) some workers originally employed in the covered sectors will move to the uncovered sectors, driving down wages in the uncovered sectors.
• D) all workers will be worse off.

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Definitions:

Ledger

A ledger is a principal book or computer file for recording and totaling economic transactions by account, separated into debits and credits.

Transaction

An agreement or exchange between parties that involves the transfer of goods, services, or funds.

Account Balance

The total amount of money in a financial account, calculated by adding all deposits and subtracting all withdrawals.

Trial Balance

A bookkeeping report that lists all the balances of the general ledger accounts of a business at a certain point in time to ensure that debits equal credits.