If the Minimum Wage Rate Is Set Above the Equilibrium

question 74

Multiple Choice

If the minimum wage rate is set above the equilibrium wage rate, then

• A) unemployment definitely increases.
• B) unemployment definitely decreases.
• C) unemployment definitely does not change.
• D) unemployment either decreases or does not change.
• E) None of the above answers is correct because the minimum wage decreases search but its effect on unemployment is ambiguous.

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