Which of the Following Statements About Minimum-Wage Laws Are True

question 12

Multiple Choice

Which of the following statements about minimum-wage laws are true?
Minimum wages:
(i) force a market imbalance between the supply and demand for labour
(ii) increase the efficiency of labour markets
(iii) are most effective at alleviating poverty when labour demand is highly elastic

• A)(i) only
• B)(i) and (ii)
• C)(i) and (iii)
• D)(ii) and (iii)

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Definitions:

FUTA Purposes

Relates to the Federal Unemployment Tax Act, which imposes a payroll tax on businesses to fund state workforce agencies.

Federal Income Tax

This is a tax levied by the U.S. federal government on the annual earnings of individuals, corporations, trusts, and other legal entities.

Withholding Allowances

Claims made on an employee's W-4 form that determine the amount of federal income tax withheld from their paycheck.

Gross Wages

Gross wages are the total earnings of an employee before any deductions like taxes, retirement contributions, and health insurance premiums are made.