Exam 15: The Money Supply Process

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

When currency is equal to $200 billion and reserves are equal to $350 billion, and we know that the money multiplier is equal to 1.5, then the money supply will be equal to ________.

If reserves in the banking system increase by $200, then chequable deposits will increase by $500 in the simple model of deposit creation when the desired reserve ratio is ________.

Suppose your payroll cheque is directly deposited to your chequing account. Everything else held constant, total reserves in the banking system ________ and the monetary base ________.

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

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

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

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

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

In the simple model of multiple deposit creation in which banks do not hold excess reserves, the increase in chequable deposits equals the product of the change in excess reserves and the ________.

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 ________.

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

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

Explain what happens to the money multiplier and the money supply when depositor behaviour causes c to increase with all other variables remaining the same.

The money supply is ________ related to the level of borrowed reserves.

Subtracting borrowed reserves from the monetary base obtains ________.

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

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 ________.

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 ________.

If a bank has excess reserves of $5000 and demand deposit liabilities of $80000, and if the reserve requirement is 20 percent, then the bank has actual reserves of ________.