When the Bank of Canada wants to change the money supply, what does it most frequently do?
A) It changes the bank rate.
B) It changes the reserve requirement.
C) It changes its open-market operations.
D) It changes the amount of currency in circulation.

Question

Quizplus · Accepted Answer

The Bank of Canada most frequently changes the money supply by conducting open-market operations. This involves buying or selling government securities in the financial markets, which affects the amount of money that banks have available to lend out. By buying government securities, the Bank of Canada increases the amount of money in the system, while selling securities decreases it. This is a key tool for the Bank of Canada to implement its monetary policy and manage inflation.

When the Bank of Canada Wants to Change the Money