If the Bank of Canada wants to increase the money supply,it could:

Question

Quizplus · Accepted Answer

Lowering the reserve requirement means that banks are required to hold less money in reserve and can therefore lend more, increasing the money supply. Selling Canadian Treasury bills would decrease the money supply, cutting taxes would have little effect on the money supply, and increasing the bank rate would make loans more expensive and decrease borrowing, also decreasing the money supply.

If the Bank of Canada Wants to Increase the Money