When the Bank of Canada buys bonds the

Question

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When the Bank of Canada buys bonds, it increases the demand for bonds in the market. This leads to an increase in bond prices and a decrease in bond yields (interest rates). This is because as the demand for bonds increases, investors are willing to pay more for them, and as a result, the yield on the bonds decreases. Therefore, the Bank of Canada's purchase of bonds leads to an increase in bond prices and a decrease in interest rates.

When the Bank of Canada Buys Bonds the