Author Question: The table shows the balance sheet for Ralph's Bank. If the desired reserve ratio is 15 percent, the ... (Read 109 times)

kamilo84 · **on:** Jun 29, 2018

The table shows the balance sheet for Ralph's Bank. If the desired reserve ratio is 15 percent, the maximum additional amount that Ralph's Bank can loan is equal to ________.

A) 50
B) 500
C) 450
D) 2,500

Question 2

What happens to the real wage rate and potential GDP if population increases?

What will be an ideal response?

johnpizzaz · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

A

Answer to Question 2

An increase in population increases the supply of labor. As a result, the labor supply curve shifts rightward. The labor demand curve does not shift. The increase in the supply of labor means that employment increases and the real wage rate falls. The economy moves along its (unchanged) production function to a higher level of potential GDP.