The following are partial balance sheets for the Bank of Canada and the Federal Government: Bank of Canada Government Assets ($Bs): Liabilities ($Bs): Assets ($BS): Liabilities ($ BS): Securities 400LVTS -300 Exchange 500Debt 1900 Participant's Fund Settlement Foreign Deposits Balances Reserves at BOC Advances 300 Government O Securities 1100Advances 100 to LVTS of Canada from Participants Deposits Bank of Canada Currency in 900 Loans 300 Circulation The Canadian banking system has positive reserves of 300 What type of pressure is there on the overnight i-rate (ior)? Onone Osideways Oupward Odownward If the BOC wants to relieve this undesired pressure on the overnight i-rate (ior) by neutralizing the settlement balance using Government of Canada accounts, it will move Government Odeposits from BOC to Odeposits from LVTS foreign reserve deposits from Oforeign reserve deposits from LVTS Participants Participants to BOC BOC to LVTS Participants LVTS Participants to BOC

Odeposits from BOC to Odeposits from LVTS foreign reserve deposits from foreign reserve deposits from LVTS Participants Participants to BOC BOC to LVTS Participants LVTS Participants to BOC What problem does the BOC face? Government has too much Government has insufficient Government has zero Government has run out of Canadian denominated Canadian denominated deposits Canadian denominated deposits foreign reserve deposits deposits What are the final changes to the balance sheet as a result of the BOC raising money for the government? Bank of Canada Government Assets ($BS): Liabilities ($Bs): Assets ($BS): Liabilities ($BS): Securities 700 LVTS 0 Exchange 800 4 |Debt 1,900 4 Participant's Fund Foreign 300 4 Settlement 300 4 Balances Reserves Deposits at BOC Advances 600 4 Government 300 Securities 1,400 4 Advances 100 4 to LVTS of Canada from Participants Deposits Bank of Canada Currency in 1,200 4 Loans 600 4 Circulation 

Please answer the questions, and fill in the second balance sheet with values. Most of it is incorrect.