Minimum wage laws contribute to a ________ unemployment rate by raising wages above the market clearing level in some labor markets.

Question

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Minimum wage laws increase the cost of hiring workers, which leads to businesses hiring fewer workers than they would in a free market. Some workers who are willing to work for the minimum wage may become unemployed because businesses aren't willing to pay the higher wage. This results in an increase in the unemployment rate above what it would be without minimum wage laws.

Minimum Wage Laws Contribute to a ________ Unemployment Rate by Raising