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When Wages Increase,if the Substitution Effect Dominates,the Quantity of Labor

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When wages increase,if the substitution effect dominates,the quantity of labor supplied will increase.


Definitions:

Effective Rate

The actual rate of interest earned or paid on an investment or loan, taking into account compounding.

Semi-annual Payments

Payments that are made twice a year, typically in the context of loan repayments or income distributions.

Semi-annually Compounded

Relating to the process in which the interest on a loan or investment is calculated and added to the principal amount twice a year.

Effective Annual Rate

A measure of the true interest rate accounting for the effects of compounding over a year.

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