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AP® Macroeconomics

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Minimum Wage and AS

APMACR-6K4L7Y

Suppose the minimum wage was not changed for 8 years and during that time, the short run aggregate supply curve had shifted left.

Which of the following must be true?

A

Minimum wage workers have more purchasing power than before the shift.

B

Minimum wage workers have less purchasing power than before the shift.

C

Minimum wage workers have more purchasing power than workers in a foreign country.

D

Minimum wage workers have no change in purchasing power because they work at the minimum acceptable wage.

E

The Federal Reserve should increase the minimum wage.