The Floor Is Basic Economics

Economics is a complex subject filled with a maze of confusing terms and details which can be difficult to explain.

The floor is basic economics.

There is no reason to replace it right away. 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. Price floors are also used often in. The floor system has worked well so far in re normalizing the fed s policies after the extended period of exceptionally low interest rates made necessary by the financial crisis.

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 used by the government to prevent prices from being too low. Floors in wages. A price floor is the lowest legal price a commodity can be sold at.

In terms of basic economics interest on reserves increases the demand for reserves so even very large increases. 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.