Which of the Following Statements Is Most Accurate Regarding Who

question 356

Multiple Choice

Which of the following statements is most accurate regarding who benefits and loses from establishment of a minimum wage above the market clearing wage?

• A) Individuals who obtain jobs benefit because they earn a higher wage, but some individuals lose because employers will not hire them at the minimum wage.
• B) All workers benefit equally from the establishment of the minimum wage because just as many workers as before remain employed, and all earn the higher minimum wage.
• C) All employers benefit equally from the establishment of the minimum wage because they are able to hire fewer workers at a lower wage.
• D) All employers lose because they must pay the higher minimum wage to the same number of employees as they did before the minimum wage was established.

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Definitions:

Interest Rate

The part of a loan charged as interest to the borrower, typically demonstrated as an annual percentage of the unsettled loan portion.

Monthly Payment

A regularly scheduled payment that is often used to repay loans over a specific period of time.

Lump Sum

A single payment made at a particular time, as opposed to several smaller payments or installments.

Interest Rate

The cost of borrowing money or the return on investment, represented as a percentage of the principal.