Suppose a fast food restaurant was one of many hiring workers, the minimum wage was $7.25 an hour, and it was paying $7.25 an hour to new employees. Suppose a worker earns a $0.75 raise to $8.00 an hour. Now suppose the minimum wage rises to $8.25 and hour. This worker would be paid
A. $8.00 an hour.
B. $9.00 an hour.
C. $8.25 an hour.
D. somewhere between $8.25 and $9.00 an hour depending on the policies of the restaurant.
Answer: D
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Which of the following would increase net exports in the United States?
A) The United States purchases 500 silver necklaces from Mexico. B) A Mexican citizen purchases 25 shares of stock in Ford Motor Company. C) The U.S. government donates $5 million to Mexico to help victims of drought in Mexico. D) The government of Mexico purchases 500 Ford F-150 pickup trucks from the United States.
The Taxpayer Relief Act of 1997 created the Hope Higher Education Scholarship program which provides a maximum of $1,500 in tax credits for the first two years of college for families with adjusted-gross incomes of less than $100,000 . What effect do you think this act might have on the aggregate supply curve?
Answer the following statements true (T) or false (F)
1) If government decreases its purchases by $20 billion and the MPC is .8, equilibrium GDP will decrease by $100 billion. 2) If the MPC is .9, a $20 billion increase in a lump-sum tax will reduce GDP by $200 billion. 3) A recessionary expenditure gap in a mixed open economy can be measured as the extent to which aggregate expenditures (C a + I g + X n + G) fall short of real GDP at the full-employment level of real GDP. 4) The recessionary expenditure gap is the amount by which the equilibrium GDP and the full- employment GDP differ.
Calculate the rate of inflation between Year 1 and Year 2. The price index in Year 1 was 124.0. It was 130.7 in Year 2.
What will be an ideal response?