Exam 15: The Money Supply Process

If reserves in the banking system increase by $100, then chequable deposits will increase by $667 in the simple model of deposit creation when the desired reserve ratio is ________.

A bank has excess reserves of $1000 and demand deposit liabilities of $80000 when the reserve requirement is 20 percent. If the reserve requirement is lowered to 10 percent, the bank's excess reserves will be ________.

High-powered money minus currency in circulation equals ________.

When a member of the nonbank public deposits currency into her bank account, ________.

When the Bank of Canada purchases a government bond from a bank, reserves in the banking system ________ and the monetary base ________, everything else held constant.

The simple deposit multiplier can be expressed as the ratio of the ________.

Purchases and sales of government securities by the Bank of Canada are called ________.

When the Bank extends a $100 loan to the First National Bank, reserves in the banking system ________.

If the desired reserve ratio is five percent, currency in circulation is $400 billion, and chequable deposits are $800 billion, then the money multiplier is approximately ________.

When currency is equal to $100 billion and reserves are equal to $200 billion, and we know that the money multiplier is equal to 2.5, then the money supply will be equal to ________.

Everything else held constant, an increase in the excess reserve ratio will mean ________ in the M2+ money multiplier and ________ in the M2+ money supply.

Recognizing the distinction between advances to banks and the nonborrowed monetary base, the money supply model is specified as ________.

The sum of the Bank of Canada's monetary liabilities and the Canadian Mint's monetary liabilities is called ________.

When the Bank of Canada supplies the banking system with an extra dollar of reserves, deposits increase by more than one dollar-a process called ________.

If the desired reserve ratio is 25 percent, the simple deposit multiplier is ________.

The effect of an open market purchase on reserves differs depending on how the seller of the bonds keeps the proceeds. If the proceeds are kept in currency, the open market purchase ________ reserves; if the proceeds are kept as deposits, the open market purchase ________ reserves.

If the money supply is equal to $500 billion and the monetary base is equal to $250 billion, the money multiplier is equal to ________.

If a bank has excess reserves of $10000 and demand deposit liabilities of $80000, and if the reserve requirement is 20 percent, then the bank has actual reserves of ________.

If the desired reserve ratio is ten percent, currency in circulation is $400 billion, and chequable deposits are $1000 billion, then the money multiplier is approximately ________.

In the simple deposit expansion model, an expansion in chequable deposits of $1000 when the desired reserve ratio is equal to 10 percent implies that the Bank of Canada ________.