A Minimum Wage Law (That Sets the Minimum Wage Above

question 61

Multiple Choice

A minimum wage law (that sets the minimum wage above the equilibrium wage) can be expected to

• A)clear the market for unskilled workers.
• B)increase the number of unskilled workers employed.
• C)increase the number of firms in those industries where the law is effective.
• D)reduce the number of unskilled workers employed and\or reduce the number of hours worked by unskilled workers.

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Definitions:

GDP

Gross Domestic Product, a measure of the total economic output of a country, representing the value of all goods and services produced over a specific time period.

Savings Rate

The savings rate is a measure of the proportion of disposable income that households save rather than spend on consumption.

Malthusian Theory

The hypothesis proposed by Thomas Malthus suggesting that population growth tends to outpace the production of food, potentially leading to starvation, disease, and conflict.

Retail Sales

The total value of goods and services sold to consumers through retail stores, considered an indicator of consumer spending and economic health.