Suppose That the Minimum Wage Was Increased to $10 Per

question 41

Multiple Choice

Suppose that the minimum wage was increased to $10 per hour. Which of the following would be most likely to result from the minimum wage increase?

• A) an increase in the employment of low-skill workers previously employed at wage rates of less than $10 per hour
• B) an increase in the number of jobs providing low-skill workers with on-the-job training
• C) a reduction in the number of teenagers unemployed
• D) an increase in the demand for high-skill workers providing services that are a good substitute for those whose wages were pushed up by the higher minimum wage

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Definitions:

Discounted Cash Flow

A technique for determining the value of an investment by considering the future cash flows it is projected to generate, factoring in the time value of money.

Present Value

Today's worth of a single sum or series of future cash flows, discounted at a particular rate of return.

Future Cash Flow

The amount of money that is expected to be received or paid out by an entity in the future, often considered for investment or project valuations.

Discount Rate

It denotes the interest rate utilized for determining the present value of future cash flows in the course of discounted cash flow analysis.