1) During the 20th century there were many technological changes in money market (e.g., ATMs, debit cards) that made it much less necessary to carry cash in order to make purchases. Explain how these developments would influence the care drain ratio. Then explain how these developments would influence the money supply created by the Canadian banking system.

2) Suppose the Federal Reserve (the USA central bank) increases the money supply in the USA. What would be the effect of this monetary expansion in the USA on the Canadian GDP? Specifically, explain what happens to the Canadian net exports (hint: there is more than one way that the US monetary expansion influences the Canadian net exports, and you should try to describe & explain each of those influences and the overall impact).