Use the graph below to illustrate and explain what would happen in the labor market if a minimum wage was established at a level above the equilibrium wage
What will be an ideal response?
The labor supply curve would go from Wm rightward to the old supply curve. The level of employment would be determined at the intersection of the demand curve and the new labor supply curve. Before B workers were employed. With the minimum wage A workers will be employed, thus C ? A workers will lose their jobs. The A workers who keep their jobs will earn the higher wage, Wm rather than the previous equilibrium wage.
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Which of the following will NOT shift the short-run aggregate supply function?
A) changes in labor costs B) changes in the costs of nonlabor inputs C) changes in the price level D) changes in the expected price level
Over time, foreign investment is credited with the greatest contribution to economic growth in the United States.
Answer the following statement true (T) or false (F)
Suppose that if your income is $50,000, your tax is $5,000, but if your income is $100,000, your tax is $8,000. Such a tax is
A. Regressive. B. An excise tax. C. Proportional. D. Progressive.
When banks hold excess reserves, the size of the money multiplier
A) is less than the simple deposit multiplier would suggest. B) is greater than the simple deposit multiplier would suggest. C) is equal to the size of the simple deposit multiplier. D) becomes infinite.