Members of Congress are interested in increasing the minimum wage from its current rate of $7.25 an hour to $15. What affect will this have on the unemployment rate for low skilled workers? How is this likely to impact equilibrium output and the price level in the short run?

Members of Congress are interested in increasing the minimum wage from its current rate of $7.25 an hour to $15. What affect will this have on the unemployment rate for low skilled workers? How is this likely to impact equilibrium output and the price level in the short run?

Macroeconomics

13th Edition

ISBN:9781337617390

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter9: Classical Macro Economics And The Self Regulating Economy

Section: Chapter Questions

Problem 8QP

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Question

Members of Congress are interested in increasing the minimum wage from its current rate of $7.25 an hour to $15. What affect will this have on the unemployment rate for low skilled workers? How is this likely to impact equilibrium output and the price level in the short run?

Definition Definition State in which an individual is without work, despite actively seeking employment opportunities. The unemployment rate refers to the percentage of the workforce that is currently unemployed. Unemployment is one of the key indicators of the conditions prevailing in an economy. It is therefore considered a barometer that points out the condition of an economy.

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