When the Bank of Canada sells bonds on the bond market, the

Name: When the Bank of Canada sells bonds on the bond market, the
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Quizplus · Accepted Answer

When the Bank of Canada sells bonds, it is removing money from the economy and reducing the supply of money, hence the correct answer is D. The demand for money is not directly impacted by the sale of bonds. The supply of bonds may decrease as the Bank of Canada is selling bonds, but it is not the primary effect of the transaction.

When the Bank of Canada Sells Bonds on the Bond