Q1. Elucidate the impact of each of the following upon chartered bank reserves:
(1) The Bank of Canada sells government bonds in the open market to private buyers;
(2) The chartered banks reduce their indebtedness to the Bank of Canada.
Assume the economy is experiencing a recession and high unemployment. Describe the transmission mechanism through which monetary policy could address these problems
Q2. Determine which of the two investment projects a manager should choose if the discount rate.