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-(Table: Assets and Liabilities of the Banking System)Refer to Table: Assets and Liabilities of the Banking System.Suppose that the reserve ratio is 10% and the Bank of Canada sells $66 700 worth of Canadian Treasury bills to the banking system.If the banking system does NOT have any excess reserves,_____ will be _____ the money supply.

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Use the following to answer questions: 
-(Table: Assets and Liabilities of the Banking System)Refer to Table: Assets and Liabilities of the Banking System.Suppose that the reserve ratio is 10% and the Bank of Canada sells $66 700 worth of Canadian Treasury bills to the banking system.If the banking system does NOT have any excess reserves,_____ will be _____ the money supply.

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When the Bank of Canada sells $66,700 worth of Treasury bills, it reduces the reserves of the banking system by that amount. With a reserve ratio of 10%, this leads to a decrease in the money supply by $667,000 (calculated as $66,700 / 0.10).

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