The Floor Is Basic Economics

There is no reason to replace it right away.

The floor is basic economics.

The four basic economic questions are. 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. 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 also used often in. Economics is a complex subject filled with a maze of confusing terms and details which can be difficult to explain. In terms of basic economics interest on reserves increases the demand for reserves so even very large increases. A price floor is the lowest legal price a commodity can be sold at.

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. 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 used by the government to prevent prices from being too low.