How could the Bank of Canada increase the money supply?

Question

Quizplus · Accepted Answer

The Bank of Canada could increase the money supply by decreasing the bank rate, which would encourage banks to borrow more money from the central bank and lend it out to consumers and businesses. Selling government bonds (option A) would decrease the money supply, as it would take money out of circulation. Increasing the reserve requirement (option C) would also decrease the money supply, as banks would have to hold more money in reserves and would have less available to lend. Increasing the bank rate (option D) would also decrease the money supply, as it would make borrowing more expensive and decrease lending.

How Could the Bank of Canada Increase the Money Supply