Consider the Bank of Canada's purchase of Canadian government securities.What type of policy is this?

Question

Quizplus · Accepted Answer

The Bank of Canada's purchase of Canadian government securities is an expansionary policy because it raises the amount of total reserves in the banking system. When the Bank of Canada purchases government securities, it injects cash into the banking system, which increases the total reserves held by banks. This, in turn, increases the amount of available funds that banks can use to make loans and conduct other transactions, which stimulates economic activity.

Consider the Bank of Canada's Purchase of Canadian Government Securities