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What would the consolidated balance sheet of the commercial banks look like after the commercial banks fully adjusted (they are Jlly adjusted when they are
What would the consolidated balance sheet of the commercial banks look like after the commercial banks fully adjusted (they are Jlly adjusted when they are maximizing prots again) to their sale of $50m worth of TBills to the Bank of Canada? [In this question, assume that the public holds any money from the resulting loans in commercial banks as bank deposits, that is, that there is no currency drain.] Consolidated Commercial Banks Assets Liabilities CB Deposits at Bank of Canada: Deposits: Bank Notes*: Equity: Loans: T-Bills: *In the vault (G) What was the initial money supply (original balance sheets) and what was the money supply after full adjustment to the Bank of Canada's purchase of T-Bills (that is, the balance sheets of question (G)). (H) By how much did the money supply increase in total (include both the initial injection and the resulting expansion) and what is the money creation multiplier (using the assumption from (G))
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