One Advantage of a Wage Subsidy Over a Minimum Wage

question 62

Multiple Choice

One advantage of a wage subsidy over a minimum wage is the fact that:

• A) the wage subsidy will not increase work effort.
• B) a wage subsidy will be more target efficient than a minimum wage.
• C) the wage subsidy will reduce unemployment among the working poor.
• D) All of the above.

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Definitions:

Widget Industry

A fictional or generic term often used to represent any sector of manufacturing, without specifying a particular type of product.

Nonunionized Labor Market

A labor market that is composed of workers and employers where no labor unions are present to represent the workers' interests.

Minimum Wage

The minimum wage is the lowest legal wage that employers can pay their workers, set by government policy to ensure a minimum standard of living for workers.

Employment

The condition of having paid work or being engaged in a job or business.