Page 4 of 6 B2. Consider this Balance Sheet: Assets of the Central Bank Foreign assets 200 Liabilities of the Central Bank Currency in circulation Deposits of commercial banks Deposits of government of Canada Equity of the Central Bank Domestic assets 450 350 150 150 O If the Bank of Canada - Sells 75 CAD worth of foreign assets Purchases domestic assets with the 75 CAD Sells 25 CAD worth of domestic assets Executes a re-deposit of 50 CAD worth - (a) What will the value of the following assets be? (i) Foreign assets (ii) Domestic assets (b) What will the value of the following liabilities be? (i) Currency in circulation (ii) Commercial bank deposits (iii) Government deposits (iv) Monetary base (C) What may have happened to the money supply as a result of the central bank's actions? Explain. (d) Did the central bank's actions affect the aggregate demand? If so, what is the impact on the aggregate demand? Explain. (e) Did the central bank's actions affect the exchange rate? If so, what is the impact on the exchange rate? Explain