real wage inflexibility

• Real wage unemployment occurs when?

  wages are inflexible at a point higher than the free-market equilibrium wage
• how's real wage unemployment caused?

  caused by the existence of minimum wage laws
• what does The higher wage create?

  an excess supply of labour
• what does This excess supply represent?

   real wage unemployment
• introducing NMW above equip wage rate (W.e) causes the supply of labour to increase from Qe to QS and demand falls from Qe to Qd- causes unemployment of Qe to Qd to excess supply

  increase in productivity or consumer spending increases demand for labour and reduces the size of increase in unemployment