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What is the effect of expansionary monetary policy on exchange rates? (i.e the Canadian dollar). Explain why Canada imports banana. Also, explain why Canada exports
- What is the effect of expansionary monetary policy on exchange rates? (i.e the Canadian dollar).
- Explain why Canada imports banana. Also, explain why Canada exports oil.
- Suppose the reserve ratio (r) = 20% and RBC's deposits increased by $2000. Describe the deposit expansion process. How much will RBC loan out and what will they keep as reserves? Also, what is the size of the money multiplier and what does it mean? (Be sure to include loans, reserves and deposits in your answer).
These are exams practice questions so please give thorough explanation
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