A newly imposed binding minimum wage:

Question

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A newly imposed binding minimum wage typically leads to a decrease in employment, as employers who cannot afford to pay the higher wages may have to lay off workers or reduce their hours. Some businesses may even close down completely. This is because they are forced to bear higher labor costs, which may lead to reduced profits or even losses. As a result, firms may try to cut back on labor costs by laying off workers or reducing their hours, which in turn reduces overall employment levels.

A Newly Imposed Binding Minimum Wage