When an increase in the minimum wage raises the natural rate of unemployment:
A)the short-run aggregate-supply curve shifts to the right, and the long-run aggregate-supply curve shifts to the left
B)the short-run aggregate-supply curve shifts to the left, and the long-run aggregate-supply curve shifts to the right
C)both short-run and long-run aggregate-supply curves shift to the left
D)both short-run and long-run aggregate-supply curves shift to the right

Question

Quizplus · Accepted Answer

An increase in the minimum wage can lead to higher unemployment as employers may hire fewer workers due to increased labor costs. This reduction in the labor force can decrease the overall production capacity of the economy, shifting both the short-run and long-run aggregate-supply curves to the left.

When an Increase in the Minimum Wage Raises the Natural