Why is lowering the bank rate a way to expand the money supply?
A) because it encourages banks to borrow from the Bank of Canada so they can more easily accommodate their customers' needs for loans
B) because it encourages business customers to borrow directly from the Bank of Canada
C) because a lower bank rate reduces the amount of reserves banks desire to keep
D) because a lower bank rate automatically reduces excess reserves
Correct Answer:
Verified
Q121: Exhibit 13-3 Q122: What do open market operations involve? Q123: Which of the following is NOT an Q124: Suppose the Bank of Canada sells $10 Q125: What is the appropriate open market operation Q127: Suppose the desired reserve ratio is 10 Q128: Consider a policy that increases the required Q129: Consider the Bank of Canada's sale of Q130: Suppose that the desired reserve ratio is Q131: What type of monetary policy raises the
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