Some policymakers claim that raising the minimum wage leads to higher employee morale and productivity.In this sense,an increased minimum wage would be operating like

Question

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An efficiency wage is a wage rate that is higher than the market equilibrium wage, and it is paid to increase employee productivity and morale. By claiming that raising the minimum wage leads to higher employee morale and productivity, policymakers suggest that the minimum wage functions as an efficiency wage.

Some Policymakers Claim That Raising the Minimum Wage Leads to Higher