Consider if in a given economy, the parliament approves an increase in minimum wage.   Starting from the medium run equilibrium, when economy is at full employment to discuss the effects of this shock.                                                                   a)- Using a set of WS/PS curves, and only in labor market, in step by step way, explain the impacts.

Survey Of Economics
10th Edition
ISBN:9781337111522
Author:Tucker, Irvin B.
Publisher:Tucker, Irvin B.
Chapter14: Aggregate Demand And Supply
Section14.A: The Self Correcting Aggregate Demand And Supply Model
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Consider if in a given economy, the parliament approves an increase in minimum wage.   Starting from the medium run equilibrium, when economy is at full employment to discuss the effects of this shock.                                                                  

a)- Using a set of WS/PS curves, and only in labor market, in step by step way, explain the impacts.

b)- Using the aggregate supply and demand (AS/AD), and IS/LM curves, show the short and medium run equilibrium points. [No explanation, only neat and well-marked graphs are acceptable]  

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