1. If a country had a trade surplus of $50 billion and then its exports rose by $30 billion and its imports rose by $20 billion, calculate its net export.
2. Bank "A" is the only bank in the economy. The people in this economy have $20 million in money, and they deposit all their money in Bank A.

a. Bank "A" decides on a policy of holding 100% reserves. Draw a T-account for the bank.

b. Bank "A" is required to hold 5% of its existing $20 million as reserves, and to loan out the rest. Draw a T-account for the bank after this first round of loans has been made.

c. Assume that bank "A" is part of a multibank system. How much will money supply increase with that original loan of $19 million?