Suppose that the Bank of Canada buys Treasury bills.We can expect this transaction to _____ the money supply,_____ Treasury bill prices,and _____ interest rates.

Question

Quizplus · Accepted Answer

When the Bank of Canada buys Treasury bills, it injects money into the economy, increasing the money supply. This increased demand for Treasury bills raises their prices, and as a result, interest rates tend to lower.

Suppose That the Bank of Canada Buys Treasury Bills