The elasticity of demand for employees is -0.50. It is also estimated that the existing minimum wage (price floor) has increased the raise the wage by 25% above equilibrium wage
How much would the employment change if the price floor was eliminated? A) Employment would decrease by 12.5%.
B) Employment would increase by 12.5%.
C) Employment would decrease by 25%.
D) Employment would increase by 25%.
B
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Monetary policy:
A. is the use of tax increases or cuts designed to change the amount of money available for spending. B. is the use of audits to make certain that banks follow bank policy. C. is the use of money and credit controls to influence macroeconomic activity. D. exists only in textbooks and has no applicability to the "real world." Monetary policy is the use of money and credit controls to influence macroeconomic activity.
The adverse selection of wage cuts argument points out that the productivity of workers will increase if they are paid more, and so employers will often find it worthwhile to pay their employees somewhat more than market conditions might dictate
a. True b. False Indicate whether the statement is true or false