If the Bank of Canada buys government securities, then this
A) increases reserves, encourages banks to make more loans, and increases the money supply.
B) decreases reserves, causes banks to reduce their loans, and decreases the money supply.
C) decreases reserves, causes banks to reduce their loans, and increases the money supply.
D) increases reserves, causes banks to reduce their loans, and increases the money supply.
E) decreases reserves, encourages banks to make more loans, and increases the money supply.
Correct Answer:
Verified
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