Suppose the Bank of Canada buys $20 million worth of government securities from RBC, a commercial bank.

1. Using T-account analysis, show what happens to the balance sheets of the BoC immediately after this transaction.
2. Using T-account analysis, show what happens to the balance sheets of RBC immediately after this transaction.
3. To maximize profit, how much of loans can RBC make at most? Use T-account to show the change for its balance sheet reflecting this lending alone (before any cash withdrawal).
4. Assume all commercial banks have desired reserve ratio 10% and no excess reserves, and the currency-deposit ratio is 0. After the multiple deposit creation process is completed, what is the net change for the balance sheet of the whole commercial banking system? Show the T-account.