Recall that the Bank of Montreal maintains a deposit account at the Bank of Canada. Suppose that instead of loaning the money, the Bank of Montreal deposits the $10,000 into its account at the Bank of Canada.

(i) What is the change in the Money Supply (M1+)? Note: If the Money Supply remains constant, simply answer $0

(ii) What is the change in the Monetary Base? Note: If the Monetary Base remains constant, simply answer $0

(iii) Illustrate with a T-Account the effect of the deposit on the Bank of Montreal’s assets and liabilities

(iv) Illustrate with a T-Account the effect of the deposit on the Bank of Canada’s assets and liabilities