A fiscal policy of subsidizing wages will lead to a(n)________ in ________.
A) increase; labor supply
B) increase; labor demand
C) decrease; labor supply
D) decrease; labor demand

Question

Quizplus · Accepted Answer

Subsidizing wages will increase the amount of money employers are willing to pay for labor, leading to an increase in labor demand. This will in turn lead to an increase in employment levels and potentially a decrease in unemployment.

A Fiscal Policy of Subsidizing Wages Will Lead to A(n)________