To offset the effect of households and firms deciding to hold less of their money in chequing account deposits and more in currency, the Bank of Canada could

Question

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Purchasing government securities is a monetary policy tool used by central banks to increase the money supply in the economy. When the Bank of Canada buys government securities, it injects money into the banking system, which can help offset the effect of households and firms deciding to hold more currency and less in chequing accounts by increasing the amount of money available for lending and spending.

To Offset the Effect of Households and Firms Deciding to Hold