3. Money and banking: suppose that the Bank of Canada conducts an open market purchase of $5000 from a commercial bank. Assuming all banks' desired reserve ratio is 0.10, or 10 percent, and currency drain ratio is 0. Answer the questions below: a. Draw the balance sheets for the commercial bank and the Bank of Canada respectively, to show the effects of open market operation. b. By how much monetary base will increase? By how much money supply will increase? c. If banks' desired reserve ratio increases to 0.4, how does this affect the size of money multiplier? d. If currency drain ratio increases to 0.1, or 10%, how does it affect the size of money muitiplier? e. How the change of currency drain ratio has led to the changes of the money multiplier in the past two decades? Explain