How has the Bank of Canada historically viewed changes in reserve requirements to control the money supply?
A) It has been gradually lowering the reserve requirements to keep inflation rates low.
B) It has traditionally made frequent changes in order to stabilize the economy.
C) It has been reluctant to make frequent changes as this would disrupt the business of banking.
D) It has been gradually increasing the reserve requirements to keep inflation rates low.

Question

Quizplus · Accepted Answer

The Bank of Canada has historically been reluctant to make frequent changes in reserve requirements as this would disrupt the business of banking. Instead, it has primarily used other monetary policy tools, such as adjusting interest rates or open market operations, to control the money supply and stabilize the economy.

How Has the Bank of Canada Historically Viewed Changes in Reserve