Imagine that the Bank of Canada creates $1,000 of new money. Canadians do not hold any of their money in currency. The reserve requirement is 20% and banks like to hold 5% excess reserves. a)...

Extracted text: Imagine that the Bank of Canada creates $1,000 of new money. Canadians do not hold any of their money in currency. The reserve requirement is 20% and banks like to hold 5% excess reserves. a) Calculate the total of new deposits created from this $1,000 of new money. b) Calculate the new money supply created form this $1,000 of new money.