The government raises the minimum wage. If there are already unemployed people in the economy, we would expect the unemployment rate to:
A)rise.
B)stay constant.
C)fall.
D)become zero.

Question

Quizplus · Accepted Answer

When the minimum wage is raised, some employers may not be able to afford to keep all of their current employees or hire new ones, which can lead to an increase in unemployment. This is especially true for small businesses that might have a tighter budget. Therefore, if there are already unemployed people in the economy, we would expect the unemployment rate to rise.

The Government Raises the Minimum Wage