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When You Write Your Rent Cheque on Your Credit Union

Question 9

Multiple Choice

When you write your rent cheque on your credit union account and your landlord deposits it in her account at the Bank of Montreal,what will be the impact in the banking system?


A) Chartered bank reserves will rise.
B) Deposits at the Bank of Canada will fall.
C) Deposits at the Bank of Canada will rise.
D) M2 will increase and M2+ will fall.

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