Suppose that the U.S.government required firms to pay a living
Wage to workers in their subsidiaries or contracting firms in
Developing countries.As a consequence of this requirement,
Wages would likely _______ to the living wage and employment
Would likely _________.

Question

Quizplus · Accepted Answer

Requiring firms to pay a living wage would likely lead to a rise in wages, as employers would have to pay their workers more. However, this increase in labor costs may result in a decrease in employment, as companies may need to cut back on hiring in order to comply with the new wage requirement. Therefore, wages are likely to rise, but employment is likely to decrease.

Suppose That the U