NLW (10)

Question 1

Define national living wage

Answer 1

A wage rate which below employees will not pay and these people are 25+

Question 2

Explain diagram

Answer 2

Wage and quantity of labour on axes supply of labour and demand of labour, demand shifts right wards, draw MW above this and label MW x DL1 a and MW x DL2 B

Question 3

Explain labour market incentives

Answer 3

Improves incentive for people to start looking for work boosting economies labour supply, this known as a supply side policy

Question 4

Explain reduce relative poverty

Answer 4

Ensures workers in certain low paid jobs receive a high enough income to maintain average living standards

Question 5

Explain effect on relative poverty is questionable

Answer 5

It usually boosts the incomes of the middle income households who are multiple people are in work where is the greatest risk of relative properties among unemployed, elderly and single parent families where the parent is not employed

Question 6

Explain may deter foreign direct investment

Answer 6

Multinational companies may be less likely to invest in economy if labour costs are too high. If national minimum wage imposed firms already located domestically move abroad

Question 7

2 advantages?

Answer 7

Labour market incentives

Reduce poverty

Question 8

2 disadvantages?

Answer 8

May deter FDI

May not reduce relative poverty