An increase in the minimum wage above the equilibrium wage
A)reduces structural unemployment.
B)reduces frictional unemployment,
C)increases structural unemployment.
D)increases frictional unemployment.

Question

Quizplus · Accepted Answer

An increase in the minimum wage above the equilibrium wage can lead to an excess supply of labor, as employers may not be willing to hire as many workers at the higher wage. This situation can increase structural unemployment, which is unemployment resulting from industrial reorganization, typically due to technological change, rather than fluctuations in supply or demand.

An Increase in the Minimum Wage Above the Equilibrium Wage