Exhibit 14-4

-Refer to the graph in the exhibit.What can the Bank of Canada do to return the economy to its potential output?

A) sell Government of Canada Treasury securities in the open market
B) lower the bank rate
C) buy Government of Canada Treasury securities in the open market
D) print money

Question

Exhibit 14-4
 
-Refer to the graph in the exhibit.What can the Bank of Canada do to return the economy to its potential output?
 
A) sell Government of Canada Treasury securities in the open market 
B) lower the bank rate 
C) buy Government of Canada Treasury securities in the open market 
D) print money

Quizplus · Accepted Answer

The Bank of Canada can buy Government of Canada Treasury securities in the open market to increase the money supply and lower interest rates, which will stimulate economic activity and help the economy return to its potential output.

Exhibit 14-4 -Refer to the Graph in the Exhibit.What Can the Bank