QUESTION 43 1 p Suppose the Bank of Canada sells $50 million of bonds to the public. If the reserve ratio is 20 percent and banks do not hold excess reserves, which statement best describes the effects of this open-market operation? a. Bank reserves increase by $50 million, and the money supply eventually increases by $250 million. b. Bank reserves decrease by $50 million, and the money supply eventually decreases by $300 million. C. Bank reserves increase by $50 million, and the money supply eventually increases by $300 million. d. Bank reserves decrease by $50 million, and the money supply eventually decreases by $250 million. QUESTION 44 1 po If the reserve ratio decreased from 10 percent to 5 percent, which of the following would happen to the money multiplier? O a. It would rise from 10 to 20. Ob. It would rise from 5 to 10. O c. It would fall from 10 to 5. Od. It would fall from 20 to 5