Table 14.2A ($b's).Initial Balance Sheet for Bank of Canada and Canada's Bank's

Bank of CanadaChartered BanksAssetsLiabilitiesAssetsLiabilitiesSecurities65BankDeposits15Cash Reserves15Deposits225Foreign Reserves35Federal Deposits30Securities130Borrowings80Notes20Loans80Government Deposits10

The Bank of Canada buys $5 billion of securities from the Chartered Banks. After this transaction (and before the multiplier), what changes would occur to both balance sheets;

Bank of CanadaChartered BanksAssetsLiabilitiesAssetsLiabilitiesSecuritiesAnswer

60

65

70

BankDepositsAnswer

10

15

20

Cash ReservesAnswer

10

15

20

DepositsAnswer

220

225

230

Foreign ReservesAnswer

30

35

40

Federal DepositsAnswer

25

30

35

SecuritiesAnswer

125

130

135

BorrowingsAnswer

75

80

85

NotesAnswer

15

20

25

LoansAnswer

75

80

85

Government DepositsAnswer

5

10

15