Exam 15: The Money Supply Process

When the Bank of Canada calls in a loan from a bank, the monetary base ________ and reserves ________.

The money supply is ________ related to the nonborrowed monetary base, and ________ related to the level of borrowed reserves.

Which is the largest category of Bank of Canada assets?

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

During the banking panic that occurred in the United States between October 1930 and January 1931, ________.

In the simple deposit expansion model, a decline in chequable deposits of $500 when the desired reserve ratio is equal to 20 percent implies that the Bank of Canada ________.

When the Bank of Canada purchases artwork to decorate its conference room ________.

In the simple deposit expansion model, if the desired reserve ratio is 20 percent and the Bank of Canada increases reserves by $100, chequable deposits can potentially expand by ________.

Of the three players in the money supply process, most observers agree that the most important player is ________.

An increase in the monetary base that goes into ________ is not multiplied, while an increase that goes into ________ is multiplied.

For which of the following is the change in reserves necessarily different from the change in the monetary base?

In the simple deposit expansion model, if the banking system has excess reserves of $75, and the desired reserve ratio is 20 percent, the potential expansion of chequable deposits is ________.

An increase in ________ leads to an equal ________ in the monetary base in the long run.

An increase in the nonborrowed monetary base, everything else held constant, will cause ________.

During the Great Depression ________.

Which of the following are not assets on the Bank's balance sheet?

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

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

If a bank has excess reserves of $4000 and demand deposit liabilities of $100,000, and if the reserve requirement is 10 percent, then the bank has actual reserves of ________.

During the banking crisis in the United States that ended in March 1933, ________.