In the simple deposit expansion model, if the Bank of Canada purchases $100 worth of bonds from a bank that previously had no excess reserves, deposits in the banking system can potentially increase by ________.

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The potential increase in deposits is determined by the money multiplier, which is the reciprocal of the reserve ratio. When the central bank purchases bonds from a bank, it increases the bank's reserves, allowing the bank to create new loans and thus increase deposits in the banking system by a factor of the reciprocal of the reserve ratio.

In the Simple Deposit Expansion Model, If the Bank of Canada