Table 2.5

-Comparing the minimum wages between 1974 and 2011 addresses the economic concept of
A) the marginal principle.
B) the principle of voluntary exchange.
C) the principle of diminishing returns.
D) the real-nominal principle.

Question

Table 2.5
 
-Comparing the minimum wages between 1974 and 2011 addresses the economic concept of
A) the marginal principle. 
B) the principle of voluntary exchange. 
C) the principle of diminishing returns. 
D) the real-nominal principle.

Quizplus · Accepted Answer

The real-nominal principle states that the economy should be measured in real terms (adjusting for inflation) rather than nominal terms (without adjusting for inflation). Comparing minimum wages between 1974 and 2011 would require adjustment for inflation to accurately measure changes in purchasing power, making the real-nominal principle applicable.

Table 2.5 -Comparing the Minimum Wages Between 1974 and 2011 Addresses the and 2011