The purchase of government securities by the Bank of Canada will,in general,

Name: The purchase of government securities by the Bank of Canada will,in general,
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Question

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When the Bank of Canada purchases government securities, it pays for them by crediting the bank accounts of the sellers. This increases the reserves held by banks, as they now have more funds available. Therefore, the purchase of government securities by the Bank of Canada increases the quantity of reserves held by banks.

The Purchase of Government Securities by the Bank of Canada