When the Bank of Canada buys a Canadian bond in the open market
A) it has no effect on the total reserves or the money supply because the cheque it writes increases reserves at one bank but they fall at another.
B) total reserves increase by the amount of the purchase but the money supply stays the same.
C) it expands total reserves and the money supply.
D) it contracts total reserves and the money supply.
Correct Answer:
Verified
Q19: If the commercial banking system's excess reserves
Q20: The central bank for Canada is
A)the Bank
Q21: The desired reserve ratio is 10 percent
Q22: The desired reserve ratio equals 20 percent
Q23: If the Bank of Canada wishes to
Q25: The Bank of Canada sells a Canadian
Q26: If a bank's deposits at the Bank
Q27: When the Bank of Canada buys Canadian
Q28: To decrease the money supply
A)the Bank of
Q29: The desired reserve ratio is 10 percent,Bank
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