Author Question: A bank can only make a loan if it has A) excess reserves. B) a creditworthy customer willing to ... (Read 249 times)

jc611

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A bank can only make a loan if it has
 
  A) excess reserves.
  B) a creditworthy customer willing to pay a high interest rate.
  C) permission from the Federal Reserve.
  D) reserves equal to its deposits.

Question 2

What is the effect on real GDP per person if labor productivity increases?
 
  What will be an ideal response?



joshbk44

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Answer to Question 1

A

Answer to Question 2

Real GDP equals (aggregate hours)  (labor productivity). Hence an increase in labor productivity increases real GDP. Real GDP per person equals (real GDP)/(population). Therefore an increase in real GDP with no change in the population increases real GDP per person.



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