If the Bank of Canada conducts an open-market purchase,bank reserves _____ and the money supply _____.

Question

Quizplus · Accepted Answer

When the Bank of Canada conducts an open-market purchase, it buys government securities from the public. This increases the money supply because it puts more money into circulation. It also increases bank reserves because the banks now have more deposits from the government securities that they sold to the Bank of Canada.

If the Bank of Canada Conducts an Open-Market Purchase,bank Reserves