(a) Suppose the Bank of Canada (BOC) sells $25 million worth of bonds directly to

Canadas commercial banks. Show the impact this BOC action would have on the

balance sheets of the BOC and the commercial banking sector. Briefly explain your

results.

(b) Suppose the Bank of Canada (BOC) lends a Canadian commercial bank $10 million

for one week. Show the impact this BOC action would have on the balance sheets of the

BOC and the commercial bank. Briefly explain your results.