Using the T-account for the banking system, show what happens to chequable deposits in the banking...
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Using the T-account for the banking system, show what happens to chequable deposits in the banking system when the Bank of Canada sells $20 million of bonds to the First National Bank. Assume that every bank's desired reserve ratio is 5 percent, banks hold no excess reserves, the public's holdings of currency do not change, and all other banks' holdings of securities do not change. (Select the correct choice below, and fill in the answer boxes to complete your choice. Type integers or decimals. Enter a negative value to indicate a decrease, and enter a positive value to indicate an increase. Do not include plus signs in your responses.) O A. Assets Liabilities Securities $ m Loans $ m Reserves $ m Chequable deposits $ E B. Assets Securities $ Reserves $ Loans 69 $ C. Reserves Assets E E E E Liabilities Chequable deposits $ m Securities Liabilities $ m Loans $ m Chequable deposits $ m O D. Assets Liabilities Chequable deposits $ m Securities $ m Reserves $ m Loans $ m Using the T-account for the banking system, show what happens to chequable deposits in the banking system when the Bank of Canada sells $20 million of bonds to the First National Bank. Assume that every bank's desired reserve ratio is 5 percent, banks hold no excess reserves, the public's holdings of currency do not change, and all other banks' holdings of securities do not change. (Select the correct choice below, and fill in the answer boxes to complete your choice. Type integers or decimals. Enter a negative value to indicate a decrease, and enter a positive value to indicate an increase. Do not include plus signs in your responses.) O A. Assets Liabilities Securities $ m Loans $ m Reserves $ m Chequable deposits $ E B. Assets Securities $ Reserves $ Loans 69 $ C. Reserves Assets E E E E Liabilities Chequable deposits $ m Securities Liabilities $ m Loans $ m Chequable deposits $ m O D. Assets Liabilities Chequable deposits $ m Securities $ m Reserves $ m Loans $ m
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