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Initial Balance Sheets Bank of Canada ($m) Chartered Banks Consolidated Balance Sheet (Sm) Assets Liabilities Securities Foreign Reserves Assets 10 Cash Reserves 30 Securities 20

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Initial Balance Sheets Bank of Canada ($m) Chartered Banks Consolidated Balance Sheet (Sm) Assets Liabilities Securities Foreign Reserves Assets 10 Cash Reserves 30 Securities 20 Loans 60 Bank Deposits 35 Goverment Deposits Notes 220 Liabilities 10 Deposits 130 Government Deposits 80 Borrowings 80 20 The Bank of Canada redeposits S5m of Govemment of Canada money, Assume r=5% mssuming all other factors are held constant, what are the initial changes to the balance sheets before the money multiplier process as a result of the redeposit? Balance Sheets After Redeposit (Before Money Multiplier) Bank of Canada ($m) Chartered Banks Consolidated Balance Sheet($m) Assets Liabilities Assets Liabilities Securities Bank Deposits Cash Reserves Deposits Foreign Reserves Goverment Deposit Securities Government Deposits Notes Loans Borrowings ocx

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