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Following the tradition of classical economics, Pigou favoured the idea of "natural rates" to which the economy would return in most cases, although he acknowledged that sticky prices might still prevent reversion to natural output levels after a demand shock. Pigou saw the "Real Balance" effect as a mechanism to fuse Keynesian and classical ...
Many of the quantities of interest, such as income and consumption, are monetary. Keynes often expresses such quantities in wage units (Chapter 4): to be precise, a value in wage units is equal to its price in money terms divided by W, the wage (in money units) per man-hour of labour. Therefore it is a unit expressed in hours of labour.
They begin by defining terms. The gross wage reflects the pre-tax wage a laborer receives. [14] The simplest form of the net wage is the pre-tax wage minus the income tax. In reality, however, the net wage is the gross wage times one minus the tax rate, all divided by the price of consumption goods. With the status quo income tax, deadweight ...
Pigou, on the other hand, presented a logical system where perfect competition occurs when firms produce at a level where marginal cost equals price. He explained that firms operate at less than full capacity due to falling demand curves and maximization of profits at a certain output level.
The result, as Hicks points out, is the false impression that Keynes assumed wages to be constant at any level of employment short of full employment. [33] He claimed that "Hicks' procedure is completely unnecessary". Keynes explicitly declares wages to be exogenous on p247.
California is raising the minimum wage for fast food restaurant employees to $20 per hour starting April 1, 2024. This is $4 more than the state's overall minimum wage.
In all but a handful of states, employers are allowed to pay tipped workers below minimum wage — in some cases as little as $2.13 per hour — as long as they make enough in tips to earn the ...
As New Jersey ratcheted up its minimum wage on three occasions between 2019 and 2021, fast-food restaurants in the state responded by hiking menu prices to compensate.