A1. Suppose the Bank of Canada (BOC) buys $10B worth of bonds
from the Canadian banking system that operates with a desired
reserve ratio of 5%. Immediately after the transaction, the balance
sheet of the BOC expands by $10B, while balance sheet of the
banking system is the same size, but in the long run, the balance
sheet of both the BOC and the banking system expand by $200B.
A2.A given increase in the money supply is more effective at...