By transferring government deposits between accounts in the Bank of Canada and accounts in the commercial banks, the Bank of Canada:

Question

Quizplus · Accepted Answer

The Bank of Canada transfers government deposits between accounts in the Bank of Canada and accounts in commercial banks to offset the effects of government receipts and payments on the reserve position of the banks. This helps maintain stability in the banking system by ensuring that the banks' reserve levels are not unduly affected by the government's financial activities.

By Transferring Government Deposits Between Accounts in the Bank of Canada