Question 5 (15 marks) Answer the following questions: a. Suppose money supply in the Canadian economy is more. What are the tools the Bank of Canada will use to reduce the money supply? Explain the process. Answer b. Suppose the Central Bank of Canada purchased $20 million worth of bonds. How it will affect money supply? What is the maximum possible change in the money supply if the required reserve ratio is 0.57 Answer c. How do bank reserves change? Answer: d. Will the money supply increase or decrease? Explain. Answer: c. What is the maximum possible change in the money supply if the required reserve ratio is 0.57