Is the Minimum Wage Fair

question 71

Multiple Choice

Is the minimum wage fair?

• A) Yes, because all workers benefit because they are paid more.
• B) No, because it enhances the prospects of voluntary exchange.
• C) No, because workers who lose their jobs are made worse off.
• D) Yes, because firms must pay a wage closer to a living wage.
• E) Yes, because workers need the extra income.

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Definitions:

Loanable Funds

The money available for borrowing in the financial markets, determined by saving behaviors and institutional lenders' policies.

Interest Rate

The cost of borrowing money or the return on deposited funds, expressed as a percentage of the principal.

Loanable Funds Theory

The Loanable Funds Theory is an economic principle that posits the market interest rates are determined by the supply and demand for loans, where saving provides the supply and investments demand the funds.

Equilibrium Interest Rate

The interest rate at which the quantity of loanable funds demanded equals the quantity of loanable funds supplied, resulting in a balance between savings and investment.