If there are zero excess reserves in the Canadian banking system and the Bank of Canada raises the required reserve ratio from 10 percent to 20 percent,then

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When the Bank of Canada raises the required reserve ratio from 10 percent to 20 percent, banks are required to hold more reserves against deposits. This reduces the amount of money banks can lend out, leading to a decrease in the money supply. The multiplier effect (in this case, implied to be 5) means that the decrease in lending capacity is magnified throughout the economy, leading to a significant reduction in the overall money supply.

If There Are Zero Excess Reserves in the Canadian Banking