An increase in an effective federal minimum wage would tend to cause ________.

Question

Quizplus · Accepted Answer

An increase in an effective federal minimum wage would increase the cost of labor for employers. As labor costs rise, employers may choose to hire fewer workers or reduce the number of hours worked by their employees. This means that there would be a decrease in employment. On the other hand, those who remain employed would receive higher wages, leading to an increase in wage rates. Therefore, the best choice is D, an increase in wage rates and a decrease in employment.

An Increase in an Effective Federal Minimum Wage Would Tend