In the model of the money supply process, the Bank of Canada's role in influencing the money supply is represented by ________.

Question

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In the model of the money supply process, the Bank of Canada's role in influencing the money supply is through nonborrowed reserves and borrowed reserves. Nonborrowed reserves are the reserves that the commercial banks hold at the Bank of Canada, while borrowed reserves are the reserves that commercial banks borrow from the Bank of Canada through the overnight lending facility. The Bank of Canada can use its control over the supply of nonborrowed and borrowed reserves to influence the money supply in the economy. Desired reserves and currency holdings are not part of the Bank of Canada's role in the money supply process.

In the Model of the Money Supply Process, the Bank