Exam 16: The Money Supply Process

If a bank has excess reserves of $15,000 and demand deposit liabilities of $80,000,and if the reserve requirement is 20 percent,then the bank has total reserves of ________.

A simple deposit multiplier equal to four implies a desired reserve ratio equal to ________.

When the Bank of Canada sells $100 worth of bonds to First National Bank,reserves in the banking system ________.

If the desired reserve ratio is ten percent,currency in circulation is $400 billion,chequable deposits are $800 billion,and excess reserves total $0.8 billion,then the excess reserves-chequable deposit ratio is ________.

The formula linking the money supply to the monetary base is ________.

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.

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 ________.

If a bank has excess reserves of $20,000 and demand deposit liabilities of $80,000,and if the reserve requirement is 20 percent,then the bank has total reserves of ________.

Decisions by ________ about their holdings of currency and by ________ about their holdings of excess reserves affect the money supply.

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

There are two ways in which the Bank can provide additional reserves to the banking system: it can ________ government bonds or it can ________ advances to banks to commercial banks.

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 ________.

Individuals that lend funds to a bank by opening a chequing account are called ________.

In the simple deposit expansion model,a decline in chequable deposits of $1,000 when the desired reserve ratio is equal to 20 percent implies that the Bank of Canada ________.

The M2+ money multiplier is ________.

In the model of the money supply process,the bank's role in influencing the money supply process is represented by ________.

High-powered money minus currency in circulation equals ________.

The equation linking the monetary base to the levels of chequable deposits and currency is ________.

Decisions by depositors to increase their holdings of ________,or of banks to hold excess reserves will result in a ________ expansion of deposits than the simple model predicts.

Which is the largest category of Bank of Canada assets?