Question

To decrease the money supply, the Bank of Canada could O a) lower the bank rate. O b) lower the required reserve ratio. O c)
An increase in interest rate in the economy will have what effect on macroeconomic equilibrium in the long run? a) The price
Assets Liabilities Reserves $10,000 Deposits $50,000 Loans $40,000 M ATADO If the required reserve ratio is 10 percent, how m
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Answer #1

1)c) sell government securities

2) c) the price level will fall and the level of output will be unaffected.

3)b) $5000

Required reserves = 0.1*50000= 5000

Loans= 50000-5000= 45000

Additional loans= 45000-40000= 5000

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