Increases in the Minimum Wage Are Intended to Raise the Incomes

question 13

Multiple Choice

Increases in the minimum wage are intended to raise the incomes of low-income workers.Many economists favor a different policy to achieve this goal,a policy that avoids the deadweight losses that result from the minimum wage.What is this policy?

• A)distribution of food stamps to low-income consumers
• B)distribution of vouchers that can be used for rent or mortgage payments
• C)the Alternative Minimum Tax
• D)the earned income tax credit

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Definitions:

Deflation

A drop in the overall pricing of goods and services, typically signaling a shrinkage in the money or credit available in the economy.

National Income

The total value of all the goods and services produced by a country’s economy in a specific period, including income from foreign investments.

Gross Investment Expenditures

The total amount spent on new capital assets, before accounting for depreciation.

Government Expenditures

The spending by the government sector on goods and services, including public services and public investment.