To increase the monetary base, the Bank of Canada can:
A)conduct open-market purchases.
B)conduct open-market sales.
C)raise the interest rate paid on reserves.
D)lower the required reserve ratio.

Question

Quizplus · Accepted Answer

Conducting open-market purchases increases the monetary base by adding reserves to the banking system, as the central bank buys government securities from the market.

To Increase the Monetary Base, the Bank of Canada Can