The principal method used by the Bank of Canada to change the money supply is through open-market operations.Use the aggregate demand-aggregate supply model to illustrate graphically the impact in the short run and the long run of a Bank decision to increase open-market purchases.Be sure to label:
i.the axes
ii.the curves
iii.the initial equilibrium values
iv.the direction the curves shift
v.the short-run equilibrium values
vi.the long-run equilibrium values.State in words what happens to prices and output in the short run and the long run.

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The Answer of The principal method used by the Bank of Canada to change the money supply is through open-market operations.Use the aggregate demand-aggregate supply model to illustrate graphically the impact in the short run and the long run of a Bank decision to increase open-market purchases.Be sure to label:
i.the axes
ii.the curves
iii.the initial equilibrium values
iv.the direction the curves shift
v.the short-run equilibrium values
vi.the long-run equilibrium values.State in words what happens to prices and output in the short run and the long run.

The Principal Method Used by the Bank of Canada to Change