To expand the money supply,the Bank of Canada would have to:

Question

Quizplus · Accepted Answer

To expand the money supply, the Bank of Canada would have to make an open purchase of Treasury bills. This means that the Bank of Canada would buy Treasury bills from banks, which would increase the money supply as banks now have more money to lend out. This is known as open market operations and is one of the main tools that the Bank of Canada uses to regulate the money supply in the economy. Open sale of Treasury bills, raising interest rates, or getting approval from the federal government would not necessarily lead to an expansion of the money supply.

To Expand the Money Supply,the Bank of Canada Would Have