Exam 16: The Money Supply Process

A decrease in ________ leads to an equal ________ in the monetary base in the long run.

The monetary liabilities of the Bank of Canada include ________.

When a member of the nonbank public withdraws currency from her bank account,________.

In the simple deposit expansion model,an expansion in chequable deposits of $1,000 when the desired reserve ratio is equal to 10 percent implies that the Bank of Canada ________.

If reserves in the banking system increase by $100,then chequable deposits will increase by $500 in the simple model of deposit creation when the desired reserve ratio is ________.

When an individual sells a $100 bond to the Bank,she may either deposit the cheque she receives or cash it for currency.In both cases ________.

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 ________.

The relationship between borrowed reserves,the nonborrowed monetary base,and the monetary base is ________.

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

A bank has excess reserves of $1,000 and demand deposit liabilities of $80,000 when the reserve requirement is 25 percent.If the reserve requirement is lowered to 20 percent,the bank's excess reserves will be ________.

Everything else held constant,an increase in the time deposit ratio will result in ________ in the M1+ money multiplier and ________ in the M2+ money multiplier.

When the Bank of Canada extends a loan to a bank,the monetary base ________ and reserves ________.

The relationship between advances to banks,the nonborrowed monetary base,and the monetary base is ________.

Both ________ and ________ are Bank of Canada assets.

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

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

Explain two ways by which the Bank of Canada can increase the monetary base.Why is the effect of Bank of Canada actions on bank reserves less exact than the effect on the monetary base?

The two most important categories of assets on the Bank's balance sheet are ________ and ________ because they earn interest.

If the desired reserve ratio is 10 percent,the simple deposit multiplier is ________.