Discussion on the two problems facing the Bank of Canada
1. Illustrate what are the two problems facing the Bank of Canada in trying to control the money supply precisely?
2. Using separate graphs, demonstrate Illustrate what happens to money supply, money demand, the value of money also the price level if:
a. The Bank of Canada increases the money supply.
b. People decide to demand less money at every price level.
c. Banks decide to hold more excess reserves.