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If Chartered Banks Are Increasing Their Borrowing from the Bank

Question 22

Multiple Choice

If chartered banks are increasing their borrowing from the Bank of Canada while the Bank of Canada is selling government securities,what impact will the borrowing of the chartered banks from the Bank of Canada tend to have?


A) It will tend to reinforce the contractionary open market operations policy.
B) It will tend to reinforce the expansionary open market operations policy.
C) It will tend to counteract the expansionary open market operations policy.
D) It will tend to counteract the contractionary open market operations policy.

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