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-(Figure: Changes in the Money Supply) Refer to Figure: Changes in the Money Supply.If the supply of money shifts from MS₁ to MS₂,the Bank of Canada must have _____ Treasury bills in the open market.

Question

Use the following to answer questions:

-(Figure: Changes in the Money Supply) Refer to Figure: Changes in the Money Supply.If the supply of money shifts from MS₁ to MS₂,the Bank of Canada must have _____ Treasury bills in the open market.

Quizplus · Accepted Answer

If the supply of money shifts from MS₁ to MS₂, this means that the money supply has increased. The Bank of Canada can increase the money supply by purchasing Treasury bills in the open market, which injects money into the economy. Therefore, the Bank of Canada must have bought Treasury bills in the open market.

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