If the Bank of Canada buys government securities from the chartered banks when the SRAS is relatively flat,what should we expect to happen to the price level and real GDP?

Question

Quizplus · Accepted Answer

When the Bank of Canada buys government securities, it increases the money supply, leading to lower interest rates and increased investment and consumption. With a relatively flat SRAS, the economy can expand significantly without a large increase in the price level, resulting in a substantial rise in real GDP and a slight increase in the price level.

If the Bank of Canada Buys Government Securities from the Chartered