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If a Minimum Wage Is Introduced That Is Above the Equilibrium

Question 50

Multiple Choice

If a minimum wage is introduced that is above the equilibrium wage rate,


A) the supply of labour increases and the supply of labour curve shifts rightward.
B) job-search activity increases.
C) unemployment decreases because more workers accept jobs at the higher minimum wage rate.
D) the quantity of labour demanded increases.
E) the quantity of labour supplied decreases because of the increase in unemployment.

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