Fill in the blanks to make the following statements correct. a. Suppose the Bank of Canada purchases a $10,000 bond from Bob's Financial Firm, Bob's deposits its cheque at the CIBC. This is a new deposit to the banking sys and will allow the commercial banks to lend more b. If the CIBC has a target reserve ratio of 20 percent, it will keep $ 2000 as reserves a will lend $ 8000. c. Assuming there is no cash drain from the banking system, the ultimate effect is in deposits in the banking system of $10,000 = $

Fill in the blanks to make the following statements correct. a. Suppose the Bank of Canada purchases a $10,000 bond from Bob's Financial Firm, Bob's deposits its cheque at the CIBC. This is a new deposit to the banking sys and will allow the commercial banks to lend more b. If the CIBC has a target reserve ratio of 20 percent, it will keep $ 2000 as reserves a will lend $ 8000. c. Assuming there is no cash drain from the banking system, the ultimate effect is in deposits in the banking system of $10,000 = $

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter11: The Monetary System

Section: Chapter Questions

Problem 5PA

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