When Unemployment Is Widespread and the Wage Is Above Its

question 50

Multiple Choice

When unemployment is widespread and the wage is above its market clearing level,a cut in employer payroll tax will

• A) be largely ineffective.
• B) benefit employers and have no effect on workers.
• C) increase employment, reduce unemployment, and have little to no effect on wages.
• D) drive up wages but have little to no effect on employment and unemployment.

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Definitions:

Sherman Act

A landmark federal statute in the field of Antitrust Law passed by Congress in 1890, which outlaws monopolistic business practices.

Foreign Companies

Businesses that are incorporated or registered outside of a country’s borders and operate within that country.

U.S. Commerce

Refers to the economic activities and trade within the United States, including transactions of goods and services.

Interstate Commerce Act

A United States federal law designed to regulate the railroad industry, particularly its monopolistic practices, by requiring reasonable and just rates with the establishment of the Interstate Commerce Commission.