A Politician Was Recently Quoted as Saying, "Our Country Can

Multiple Choice

A politician was recently quoted as saying, "Our country can only reach full employment by raising the minimum wage, which would cause the demand for products to increase . . . and eventually cause production to expand." His analysis overlooks the fact that

A) minimum wage legislation increases costs of production (and thus product prices) and creates an excess supply (unemployment) of unskilled labor.
B) automation is the prime cause of unemployment.
C) full employment can only be reached by increasing the minimum wage substantially.
D) minimum wage legislation may increase the employment of low-skilled workers, but this will be offset by an equal reduction in the employment of skilled workers.