Exam 16: The Money Supply Process

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 monetary base is ________.

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

If the desired reserve ratio is one-third,currency in circulation is $300 billion,and chequable deposits are $900 billion,then the money multiplier is approximately ________.

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

Subtracting borrowed reserves from the monetary base obtains ________.

The formula for the simple deposit multiplier can be expressed as ________.