(b) [2 points) How much currency is in circulation (le., not in the banking system)? (c) [2 points] What factors are considered by the commercial banks when determining the amount of loans they issue? (d) [2 points] What is the leverage rate (Le, the ratio of total assets to capital) of the commercial banks? (e) [2 points] If 75% of the bank's loans go bad (Le, the borrowers default) and are now worthless, what happens to the banks capital/equity? Is the bank bankrupt (pun intended)? Now, suppose the Bank of Canada buys $100 million worth of Government of Canada Bonds from the commercial banks using banknotes (Le, cash) which it issues/creates and sends to the commercial banks. (1) [2 points] What does the balance sheet of the Bank of Canada look like immediately following this purchase of Government of Canada Bonds? (Fill in the balance sheet table below.) Bank of Canada Assets Liabilities Government of Canada Bonds: Reserves: Other Assets: Currency:(g) [2 points] What would the consolidated balance sheet of the commercial banks look like immediately following their sale of $100m worth of Government of Canada Bonds? (Fill in the balance sheet table below.) Consolidated Commercial Banks Assets Liabilities Loans & Securities: Deposits Government of Canada Bonds: Reserves: -with BoC: -cash in vault Capital: (h) [2 points] What is the reserve ratio of the commercial banks immediately following fol- lowing their sale of $100 million worth of Government of Canada bonds. Did reserves rise or fall. (1) [2 points] How much "excess reserves" do the commercial banks now hold? ( [2 points] What would the consolidated balance sheet of the commercial banks look like after the commercial banks fully adjusted (they are fully adjusted when they are maximizing profits again) to their sale of $100 million worth of Government of Canada bonds 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 Loans & Securities Deposits: Government of Canada Bonds: Reserves: -with BoC: -cash in vault Capital: (k) [2 points] How much has the money supply (Le., currency in circulation and bank deposits) increased compared to before the Bank of Canada bought the bonds? What is the money multiplier?2. [22 points] Suppose the banking system is in equilibrium (the commercial banks are maxi- mixing profits) with the following balance sheets (in millions of dollars): Bank of Canada Assets Liabilities Government of Canada Bonds: 1,250 Reserves: 500 Other Assets: 0 Currency: 750 Consolidated Commercial Banks Assets Liabilities Loans & Securities: 13,800 Deposits: 14,010 Government of Canada Bonds: 500 Reserves: 700 -with BoC: 500 -cash in vault: 200 Capital: 1000 (a) [2 points) What is the desired reserve ratio of the commercial (chartered) banks