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Suppose the Bank of Canada purchases a $1000 bond from Jane's Financial Firm, which then deposits its cheque at the CIBC. This is a(n) ___________
Suppose the Bank of Canada purchases a $1000 bond from Jane's Financial Firm, which then deposits its cheque at the CIBC. This is a(n) ___________ deposit to the banking system and will allow the commercial banks to ___________. Continuing on from part (a), if the CIBC has a target reserve ratio of 5 percent, it will keep ___________ dollars as reserves and will lend ___________ dollars. Assuming there is no cash drain from the banking system, the ultimate effect is a(n) _________ in deposits in the banking system of ___________ ___________
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