1. What happens to real wages if the Federal Reserve increases the money supply?

2. Gu sells $45 worth of bonds to the Federal Reserve. Given a reserve requirement ratio of 10%, what is the potential increase to the money supply?

3. The supply of loanable funds in Country K has decreased. Will the value of Country K's currency increase, decrease, or remain unchanged?

4. Continuing with Country K, based on the scenario in Q3, will Country K's exports increase, decrease, or remain unchanged?

5. Name one reason why the ability of the money supply to reach a potential could be less than that potential.