Which of the following will not happen when the Bank of Canada buys bonds from the public in the open market?
A)The desired reserve ratio will increase.
B)The money supply will increase.
C)The deposits of chartered banks will increase.
D)Chartered bank reserves will increase.

Question

Quizplus · Accepted Answer

When the Bank of Canada buys bonds from the public in the open market, it injects money into the economy. This increases the supply of money and the deposits of banks, which in turn increases the reserves of chartered banks. However, it does not affect the desired reserve ratio, which is set by individual banks and is not directly influenced by the Bank of Canada's actions.

Which of the Following Will Not Happen When the Bank