Minimum wage laws cause unemployment because the legal minimum wage is set
A) below the market wage, causing labor demand to be greater than labor supply.
B) too low.
C) above the market wage, causing labor demand to be greater than labor supply.
D) below the market wage, causing labor demand to be less than labor supply.
E) above the market wage, causing labor demand to be less than labor supply.
E
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At full employment,
A) the inflation rate is zero. B) the inflation rate must equal the natural unemployment rate. C) the unemployment rate is zero. D) real GDP exceeds potential GDP. E) the unemployment rate is equal to the natural unemployment rate.
The quantity of labor supplied depends on the
A) money wage rate not the real wage rate. B) real wage rate not the money wage rate. C) price of output not the money wage rate nor the real wage rate. D) level of profits.