Refer to Table 9-5. The required reserve ratio is 10%. What is the maximum amount of new loans that Bolton bank can create and by how much can Bolton initially increase the money supply, assuming that newly created deposits are transferred to another bank?

A contractionary fiscal policy negates some of the leftward shift of the aggregate demand curve because the resulting fall in interest rates

A) increases the quantity of investment, raises the exchange rate and boosts net exports. B) discourages savings, decreases the quantity of investment, raises the exchange rate, and reduces net exports. C) increases the quantity of investment, lowers the exchange rate, and boosts net exports. D) discourages savings, increases consumption, and reduces the quantity of investment and imports.

After trade opens, the short run impact on the income of the variable factor will be

A) a decrease. B) an increase. C) zero. D) indeterminate, depending on the consumption pattern of the owners of the variable factor. E) indeterminate, depending on the productivity of the variable factor.