To increase the money supply, which of the following could the Bank of Canada do?
A)sell government bonds
B)increase the bank rate
C)decrease the reserve requirement
D)decrease the money multiplier

Question

Quizplus · Accepted Answer

Decreasing the reserve requirement allows banks to loan out a greater portion of their deposits, which leads to an increase in the money supply. A, B, and D would have the opposite effect and decrease the money supply.

To Increase the Money Supply, Which of the Following Could