Question: Question five: 10 points A. Suppose that currency in circulation is $20m, and deposits are $50m. Suppose also that reserves are $10m a. Calculate the

Question five: 10 points A. Suppose that currency in circulation is $20m, and deposits are $50m. Suppose also that reserves are $10m a. Calculate the monetary base and the money supply. b. Calculate the effect on the money supply of a decrease in currency in circulation to $10m. c. What would the bank do to offset the effects of the decrease in the currency in circulation to $10m? B. Bank of Canada moves $100m dollars worth of government deposits out of its books and into commercial banks. d. Show the relevant accounting entries e. Indicate the size of the effect on the money supply

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