Question one: Consider the hypothetical consolidated balance sheet of the banking system in Canada: Assets {$m) Liabilities ($m} Reserves Deposits 1000 Bonds Loans ?50 Total 1am Total 1W0 Desired Reserve Flatio = 5% Estimate Currency in circulation is $500m 0 Based on the information provided complete the above table. 0 What is the value of the monetary base in Canada? 0 What is the value of the money supply in Canada? 0 What is the value of the money multiplier? 0 Suppose the Bank of Canada were to engage in an open market purchase of $50m worth of bonds; 0 By how much does the monetary base change? 0 By how much does the money supply change? 0 What would be the nal value of deposits once the money creation process is complete? 0 What would be the nal value of currency once the money creation process is complete? 0 This open market purchase would have been done to enforce a change in the policy rate - what would have been the change in the policy rate? I Explain how this would transmit to impact the economy through the AD-AS model. I Given this policy action, what can we infer about the bank of Canada's future ination expectations