5) Asset price corrections worsen information problems in the financial markets by A) deterioration in banks' networth B) deterioration in borrowers' net worth and collateral value C) rises in interest rates to private sector borrowers because of flight to quality D) All of the above 6) 6) Let's say a BMO account holder writes a $10,000 check to a car dealer, which in turn deposits the check at CIBC. Else the same, we expect that A) CIBC's settlement balance will go up by $10,000. B) CIBC's vault cash will go up by $10,000. C) BMO must wire transfer $10,000 to a CIBC branch. D) BMO's vault cash will fall by $10,000. 7) 7) If the Bank of Canada buys $1 million of bonds from a non-bank investor and pays with a cheque, and the investor cashes out the cheque at CIBC, the banking sector's total reserves and notes in circulation A) rise by $1 million, do not change B) do not change; rise by $1 million C) do not change; do not change D) rise by $1 million; rise by $1 million 8) When the central bank purchases $100 bonds, which of the following must be true? A) monetary base rises by more than $100 B) M1+ rises by more than $100 C) M1+ rises by $100 D) monetary base rises by $100