PrepTest 85, Section 2, Question 24
Economist: If minimum wage levels are low, employers have a greater incentive to hire more workers than to buy productivity-enhancing new technology. As a result, productivity growth, which is necessary for higher average living standards, falls off. Conversely, high minimum wage levels result in higher productivity. Thus, raising our currently low minimum wage levels would improve the country's overall economic health more than any hiring cutbacks triggered by the raise would harm it.
Economist: If minimum wage levels are low, employers have a greater incentive to hire more workers than to buy productivity-enhancing new technology. As a result, productivity growth, which is necessary for higher average living standards, falls off. Conversely, high minimum wage levels result in higher productivity. Thus, raising our currently low minimum wage levels would improve the country's overall economic health more than any hiring cutbacks triggered by the raise would harm it.
Economist: If minimum wage levels are low, employers have a greater incentive to hire more workers than to buy productivity-enhancing new technology. As a result, productivity growth, which is necessary for higher average living standards, falls off. Conversely, high minimum wage levels result in higher productivity. Thus, raising our currently low minimum wage levels would improve the country's overall economic health more than any hiring cutbacks triggered by the raise would harm it.
Economist: If minimum wage levels are low, employers have a greater incentive to hire more workers than to buy productivity-enhancing new technology. As a result, productivity growth, which is necessary for higher average living standards, falls off. Conversely, high minimum wage levels result in higher productivity. Thus, raising our currently low minimum wage levels would improve the country's overall economic health more than any hiring cutbacks triggered by the raise would harm it.
Which one of the following, if true, most strengthens the economist's argument?
Productivity growth in a country usually leads to an eventual increase in job creation.
The economist's country has seen a slow but steady increase in its unemployment rate over the last decade.
A country's unemployment rate is a key factor in determining its average living standards.
The economist's country currently lags behind other countries in the development of new technology.
Productivity-enhancing new technology tends to quickly become outdated.
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