The Floor Is Basic Economics

Floors in wages.

The floor is basic economics.

Minimum wage is an example of a wage floor and functions as a minimum price per hour that a worker must be paid as determined by federal and state governments. Answering these four questions is essential for an economy to function properly. A price floor is the lowest legal price a commodity can be sold at. Even economists have trouble defining exactly what economics means yet there is no doubt that the economy and the things we learn through economics affects our everyday lives.

Price floors are also used often in. Basic economics is a citizen s guide to economics for those who want to understand how the economy works but have no interest in jargon or equations. What goods to produce how to use resources in the production process who receives the finished goods and when to produce the goods. In terms of basic economics interest on reserves increases the demand for reserves so even very large increases.

The floor system has worked well so far in re normalizing the fed s policies after the extended period of exceptionally low interest rates made necessary by the financial crisis. The most common price floor is the minimum wage the minimum price that can be payed for labor. Price floors are used by the government to prevent prices from being too low.