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(a) The Bank of Canada's tools to control the money supply include open-market operations and deposit switching of the Government of Canada's account held at

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(a) The Bank of Canada's tools to control the money supply include open-market operations and deposit switching of the Government of Canada's account held at the Bank to and from chartered banks. i) How should each instrument be changed if the Bank of Canada wishes to increase the money supply? ii) Will the change affect the monetary base and/or the money multiplier? (b) An economy has a monetary base of $100 billion. i) The population of the economy holds 10% currency and 90% demand deposits. Banks hold 15 \"/0 of deposits as reserves. What is the money supply? ii) The central bank decides to increase the money supply by 4%. By what percent should it increase the monetary base

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