Bank of Canada notes are
A)an asset of the chartered banks.
B)part of M1 when they are held in a bank's vault.
C)a liability of the Bank of Canada.
D)a liability of the chartered banks.
E)an asset of the Bank of Canada.

Question

Quizplus · Accepted Answer

Bank of Canada notes are liabilities of the Bank of Canada. When the Bank of Canada prints new money and uses it to buy government securities, the notes become a liability of the Bank of Canada.

Bank of Canada Notes Are