Everything else held constant, a purchase of government securities by the Bank of Canada will cause ________.
A) aggregate demand to increase
B) aggregate demand to decrease
C) the quantity of aggregate demand to increase
D) the quantity of aggregate demand to decrease

Question

Quizplus · Accepted Answer

A purchase of government securities by the Bank of Canada increases the money supply, which typically lowers interest rates and stimulates investment and consumption, leading to an increase in aggregate demand.

Everything Else Held Constant, a Purchase of Government Securities by the Bank