In 2015, President Obama proposed increasing the minimum wage from $7.25/hr to $10.10/hr. According to theory, what would likely be the result of such an increase?
A. Some workers would leave the labor market.
B. Unemployment would increase as firms lay off workers.
C. All workers prior to the wage increase would now earn at least $10.10 per hour.
D. Firms would hire more workers.
Answer: B
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Which of the following statements is true?
a. Expected inflation rate = real interest rate - nominal interest rate. b. Nominal interest rate = real interest rate + expected inflation rate. c. Real interest rate = nominal interest rate + expected inflation rate. d. Nominal interest rate = real interest rate - expected inflation rate. e. Expected inflation rate = nominal interest rate + real interest rate.
The change in the quantity demanded of any good is always caused by:
a. a change in consumers' preferences for that good. b. a change in the general income levels of the consumers who buy that good. c. an increase or decrease in the population. d. a change in the price of that good. e. a change in the price of substitute goods.
Which of the following is not included when using the expenditure approach to compute GDP?
a. Consumer spending on goods and services b. Net exports c. Government purchases d. Private investment e. Transfer payments
The rate of productivity growth is the primary determinant of an economy’s rate of _________ economic growth and higher wages.
a. long-term b. short-term c. immediate d. historic