Homework Answers
17. Option D ( The bank of Canada control money supply precisely)
Explanation-
The amount of money supply in the economy is determined by the central bank of that country. Therefore, in Canada it is determined by the Bank of Canada.
18. Option B ( $300 million)
Explanation-
Bank Capital = Bank Assets - Bank Liabilities
Bank Assets = loans + reserves + securities
= 800 + 200 + 400
= $ 1400
Bank Liabilities = Deposits + Debt
= 1000 + 100
= $ 1100
Bank Capital = 1400 - 1100
= $ 300 million
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