1. If the reserve ratio is 2% and the money supply increases by $260 000, then the initial injection into the monetary base by the Bank of Canada was:

2. Charpreet needs to pay tuition right away, she withdraws $16000 from her bank deposits to pay KPU. Assume that the reserve requirement is 20% and that banks do not hold excess reserves. After her withdrawal, required reserves:

Select one:

a.decrease by $16000.

b.decrease by $12800.

c.don't change.

d.decrease by $3200.

3. One of the main functions of a chartered bank is to loan money and they can work this because:

Select one:

a.there is a high demand for commodity money.

b.they know not everyone wants his or her deposits back at the same time.

c.they don't know how much cash they have in their vault.

d.they have so much to lend.