To _____ the money supply,the Bank of Canada could _____.

Question

Quizplus · Accepted Answer

To increase the money supply, the Bank of Canada could lower the bank rate. By doing so, banks are encouraged to borrow more from the Bank of Canada, resulting in an increase in the overall money supply. Lowering reserve requirements or conducting open-market sales, as in other choices, would decrease the money supply. Lowering the overnight rate would have a limited impact on the money supply.

To _____ the Money Supply,the Bank of Canada Could _____

To _ the Money Supply,the Bank of Canada Could _