Because the minimum wage is not indexed to inflation, when there is inflation the nominal minimum wage ________, and the real minimum wage ________.
A. decreases; remains constant
B. increases; decreases
C. remains constant; remains constant
D. remains constant; decreases
Answer: D
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Increases in the minimum wage are intended to raise the incomes of low-income workers. Many economists favor a different policy to achieve this goal, a policy that avoids the deadweight losses that result from the minimum wage. What is this policy?
A) distribution of food stamps to low-income consumers B) distribution of vouchers that can be used for rent or mortgage payments C) the Alternative Minimum Tax D) the earned income tax credit
Refer to the above figure. Excess quantity supplied will exist when
A) the price is between $0 and $6. B) the price equals $6. C) the price equals $10. D) quantity demanded equals 15.
The role that dead capital plays in a country's economic growth is that
A) growth increases since the firms using the dead capital are using it for free. B) growth increases because the dead capital is replaced with more technologically efficient capital. C) growth neither increases nor is impaired by dead capital. D) growth is impaired since the capital cannot be allocated to its most efficient use.
According to the short-run Phillips curve, which of the following would result in high rates of unemployment?
A) strong increases in aggregate demand B) strong increases in aggregate supply C) a higher inflation rate D) a lower inflation rate