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

Question

Quizplus · Accepted Answer

An increase in the minimum wage increases the cost of labor for employers, which in turn, may cause them to cut back on hiring or reduce the number of hours employees work. Therefore, this makes it harder for some workers to find jobs and reduces the overall quantity of labor demanded in the economy, leading to an increase in structural unemployment.

An Increase in the Minimum Wage