Balance sheet for bank of canada and chartered bank

Reference no: EM1314094

Suppose Bank of Canada (BOC) purchases $100 million worth of government bonds from a chartered bank. Assume BOC imposes 5% legal reserve requirement ratio to the banking system. Write two balance sheets, one for BOC and other for chartered bank, illustrating the initial effect of Bank of Canada's purchase of bonds.

Reference no: EM1314094

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