1 . Directions: Complete the following passage by using the words in the box. Each word can only be used once. Note that there is one word more than you need.

Minimum wage laws in the U.S. were first introduced during the 1930s in response to the Great Depression. This period was     1     by falling output, falling prices, and falling employment. The National Industrial Recovery Act (NIRA) of 1933 attempted to stop this downward trend by encouraging the     2     of trade association agreements that established the lowest price and minimum wages. This was the first time that minimum wages were introduced in major industries. But in 1935, the U.S. Supreme Court ruled that the NIRA was unlawful, and these initial minimum wage agreements came to an end.

In 1938, the Fair Labor Standards Act (FLSA) established a national minimum wage of $0.25 an hour. This Act     3     only applied to a relatively small share of the labor force, but has been     4     over time so that it now applies to about 90% of all nonsupervisory workers.

Introductory economies textbooks usually first introduce the minimum wage as an application of demand and supply analysis. This starting discussion is usually based on the following     5    : the labor market is perfectly competitive, the minimum wage covers all workers, and worker productivity is     6     by the wage rate.

While minimum wage increases generally receive     7     public support, economists have generally argued that such laws will result in an increase in the unemployment rate in low-wage labor markets.

An issue related to that of a minimum wage is a growing movement for a “living wage”.Living wage proposals suggest that the     8     minimum wage is too low to allow families to be above the poverty level. Now,     9     of this view support “living wage laws” that require the local government to only accept contracts from firms that pay their workers a wage that is high enough to     10     the worker above the poverty line. Under Baltimore’s “living wage” requirement, firms must pay a worker an hourly wage that will allow a full-time worker to receive an annual income greater than or equal to the poverty level for a family of three.