Exhibit 12-4 in Exhibit 12-4, When the Wage Rate

question 108

True/False

Exhibit 12-4 In Exhibit 12-4, when the wage rate increases from $9 to $12, the substitution effect outweighs the income effect.

---

Definitions:

Loans

Money, goods, or services given to an individual or entity with the expectation of a future repayment, typically with interest.

Reserve Requirement

A central bank regulation that sets the minimum fraction of customer deposits and notes that each commercial bank must hold as reserves rather than lend out.

Deposits

Funds placed into an account at a banking institution for safekeeping and possible interest accrual.

Reserves

Reserves refer to funds or other assets that banks or financial institutions hold to meet unexpected demands or regulatory requirements.