Consider an individual who moves to Canada and brings with him ($ 400 00) in Canadian currency,

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Consider an individual who moves to Canada and brings with him \(\$ 400 00\) in Canadian currency, which he deposits in a Canadian bank. For each of the cases below, compute the overall change in deposits and reserves in the Canadian banking system as a result of this new deposit.

a. 10 percent target reserve ratio, no cash drain, no excess reserves

b. 10 percent target reserve ratio, 5 percent cash drain, no excess reserves

c. 10 percent target reserve ratio, 5 percent cash drain, 5 percent excess reserves

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Macroeconomics

ISBN: 9780133910445

15th Edition

Authors: Christopher T S Ragan

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