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econ 1250 two short essay question

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The answer should be not over one single page for each questions and I need a diagram for number two. please draw a diagram as well.

simplify is okay as long as it’s correct

please help me.

1. If the bank of Canada sells some of its holdings of bonds to the chartered banks, the bank will use some of their reserves but in doing so it will add to the money supply <Is this correct or False?) and Explain your answer.

2.Illustrate and Explain how monetary policy can be destabilizing and how a monetary rule could work to reduce the amplitude of the business cycle

 
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