To increase the money supply,the Bank of Canada could

Question

Quizplus · Accepted Answer

Engaging in an open market purchase involves the Bank of Canada buying government securities from the public, which in turn increases the money supply in the economy. This is a common tool used by central banks to stimulate economic activity by increasing the availability of credit and driving down interest rates. In contrast, increasing reserve requirements, raising the discount rate, and decreasing income tax rates would all have a contractionary effect on the money supply, reducing economic activity and potentially combating inflation.

To Increase the Money Supply,the Bank of Canada Could