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Bank of Canada ($m) Initial Balance Sheets Chartered Banks Consolidated Balance Sheet ($m) Securities Foreign Reserves Assets 65 Bank Deposits Liabilities Assets Liabilities 35 Government

Bank of Canada ($m) Initial Balance Sheets Chartered Banks Consolidated Balance Sheet ($m) Securities Foreign Reserves Assets 65 Bank Deposits Liabilities Assets Liabilities 35 Government Deposits Notes 15 Cash Reserves 30 Securities 20 Loans 15 Deposits 130 Government Deposits 80 Borrowings 225 80 20 The Bank of Canada redeposits $10m of Government of Canada money. Assume r=10%. Assuming all other factors are held constant, what are the initial changes to the balance sheets before the money multiplier process as a resul of the redeposit? Balance Sheets After Redeposit (Before Money Multiplier) Bank of Canada ($m) Chartered Banks Consolidated Balance Sheet ($m) Assets Liabilities Assets Securities Bank Deposits Cash Reserves Foreign Reserves Government Deposits Securities Notes Loans Liabilities Deposits Government Deposits Borrowingsimage text in transcribed

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