2. [30 points] Suppose the banking system is in equilibrium (the commercial banks are maximizing profits) with the following balance sheets (in millions of dollars): (a) [2 points] What is the desired reserve ratio of the commercial (chartered) banks? (b) [2 points] How much currency is in circulation (i.e., not in the banking system)? (c) [2 points] What factors are considered by the commercial banks when determining the amount of loans they issue? (d) [2 points] What is the leverage rate (i.e., the ratio of total assets to capital) of the commercial banks? (e) [ 2 points] If 7.5% of the bank's loans go bad (i.e., the borrowers default) and are now worthless, what happens to the banks capital/equity? Is the bank bankrupt (pun intended)? Now, suppose the Bank of Canada buys $100 million worth of Government of Canada Bonds from the commercial banks using banknotes (i.e., cash) which it issues/creates and sends to the commercial banks. (f) [2 points] What does the balance sheet of the Bank of Canada look like immediately following this purchase of Government of Canada Bonds? (Fill in the balance sheet table below.)