Question

In: Economics

Suppose that a new law is passed that requires all workers over the age of 65...

Suppose that a new law is passed that requires all workers over the age of 65 to retire. The effect of this law would be to:

a. lower the bargaining power of workers leading to a lower real wage at every unemployment rate.

b. lower the bargaining power of workers leading to a higher real wage at every unemployment rate.

c. raise the bargaining power of workers leading to a higher real wage at every unemployment rate.

d. no change in the bargaining power of workers and lead to an increase in the unemployment rate and a lower real wage.

Solutions

Expert Solution

This law will reduce the number of workers in the market and fewer workers in the market will be demanding more wages because of higher bargaining power that they will have.

The answer is "C".

Rahul Sunny answered 2 years ago
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