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Suppose the Bank of Canada Purchases $5,000 in Canadian Government

Question 100

Multiple Choice

Suppose the Bank of Canada purchases $5,000 in Canadian government securities from the Last National Bank, and the Last National Bank's account at the Bank of Canada increases by $5,000.How does this transaction affect the Last National Bank's balance sheet?  


A)  The Last National Bank's balance sheet shows a change in the composition of its assets. 
B)  The Last National Bank's assets rise by $5,000 and its liabilities rise by $5,000. 
C)  The National Bank's assets fall by $5,000 and its liabilities fall by $5,000. 
D)  The National Bank's assets rise by $5,000 and its liabilities fall by $5000.

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