The Bank of Canada wants to increase the money supply by printing and distributing 1 million dollars. What will be the actual increase in money supply if the public holds one-fourth of the currency as cash and deposits rest of the money in banks that hold 5 percent of their deposits as reserves?

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The Answer of The Bank of Canada wants to increase the money supply by printing and distributing 1 million dollars. What will be the actual increase in money supply if the public holds one-fourth of the currency as cash and deposits rest of the money in banks that hold 5 percent of their deposits as reserves?

The Bank of Canada Wants to Increase the Money Supply