In the Classical Model, What Occurs If a Wage of $20/hour

question 91

Multiple Choice

In the classical model, what occurs if a wage of $20/hour results in unemployed workers?

• A) The workers will go on strike to demand that more jobs be created.
• B) Producers will quickly create more jobs and hire the unemployed workers, so unemployment is short-lived.
• C) The wage rate will drop, more workers will be hired, and the unemployment rate falls.
• D) The government will step in and order firms to hire more workers.

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Definitions:

Can Be Verified

Indicates that a certain piece of information, claim, or data can be checked and confirmed for accuracy or truthfulness.

Positive Economic Statement

An objective statement based on empirical evidence that describes the world as it is. These statements can be tested and validated through observation.

Marginal Tax Rates

The rate at which tax is charged on an additional dollar of income, which can vary based on income levels and tax brackets.

Gasoline Purchased

The amount of gasoline acquired by consumers, often measured in gallons or liters, for the purpose of powering vehicles.