The Floor Is Basic Economics

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.

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. Price floors are also used often in. In terms of basic economics interest on reserves increases the demand for reserves so even very large increases. Price floors are used by the government to prevent prices from being too low.

Answering these four questions is essential for an economy to function properly. What goods to produce how to use resources in the production process who receives the finished goods and when to produce the goods. There is no reason to replace it right away. A price floor is the lowest legal price a commodity can be sold at.

Floors in wages. The most common price floor is the minimum wage the minimum price that can be payed for labor. 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.