Assume the public holds a fixed amount of currency and the, Business Economics

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Assume the public holds a fixed amount of currency and the

Assume the public holds a fixed amount of currency and the chartered banks have a desired reserve ratio of 10%.

Assuming the Bank of Canada buys $50 million in government of Canada bonds from bond brokers, provide numerical answers to each of the following questions.

[a] What is the ultimate change in the dollar size of loans caused by the action of the Bank of Canada?

[b] What is the ultimate change in the dollar size of the money supply?

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