When the Bank of Canada makes an open market purchase,the money supply will ________,which will cause long-term real interest rates to ________.
A) increase; increase
B) increase; decrease
C) decrease; increase
D) decrease; decrease

Question

Quizplus · Accepted Answer

An open market purchase by the Bank of Canada increases the money supply, which typically leads to a decrease in long-term real interest rates as more money is available for lending.

When the Bank of Canada Makes an Open Market Purchase,the