1. Suppose the bank of Canada wanted to increase the supply of money. How could it use monetary policy achieve the goal?
2. The money demand curve is shown in a graph with interest rate on short term assets on the vertical axis. Why use short-term interest on the vertical axis and not the rate of return on other financial asset?
3 what will happen to the money supply is Jamie withdraws $400 from her chewing account and reserve ratio is 5%
4. Using gold as an example, what is the difference between commodity money and commodity backed money?
5. Suppose the annual inflation rate at 7% and 3% of the labour force is unemployed. If you were on the governing council of the bank of Canada, what action would you prescribe? How would this affect the economy, the inflation rate and the unemployment rate?