How may the bank of Canada influence the price level? A) By conducting open-market sales and...
How may the bank of Canada influence the price level?
A) By conducting open-market sales and raising the bank rate
B) By conducting open-market sales and lowering the bank rate
C) By conducting open market purchases and raising the bank rate
D) By conducting open-market purchases and lowering the bank rate
Homework Answers
Correct option: (D) By conducting open market purchases and lowering the bank rate
Reason: By conducting open market purchases of securities as well as reducing bank rate will increase the money supply in the economy, leading to an increase in the price level.
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How may the bank of Canada influence the price level?
A) By conducting open-market sales and...
Explain how the Bank of Canada implements open market operations to achieve price stabilization.
Explain how the Bank of Canada implements open market operations to achieve price stabilization.
When does the supply of money increase? (1 mark) a. when the Bank of Canada increases...
When does the supply of money increase? (1 mark) a. when the Bank of Canada increases the overnight rate b. when the Bank of Canada makes open-market sales c. when the Bank of Canada makes open-market purchases d. when the Bank of Canada increases the bank rate
Question #7 (Chapter 10) Suppose that the Bank of Canada implements an open market purchase of...
Question #7 (Chapter 10) Suppose that the Bank of Canada implements an open market purchase of $100 of government bonds from the Royal Canadian Bank. (a) Illustrate with a T-Account the initial effect of the open market purchase on the Royal Canadian Bank's assets and liabilities Assets Liabilities + (b) Illustrate with a T-Account the effect of the open market purchase on the Bank of Canada's assets and liabilities Assets Liabilities (c) What is the initial change in the Monetary...
If the Bank of Canada wants to increase the overnight lending rate using open-market operations, it...
If the Bank of Canada wants to increase the overnight lending rate using open-market operations, it should _____________ bonds. a) sell b) buy
6. Suppose that the Bank of Canada conducts an open market purchase of $2000 from a...
6. Suppose that the Bank of Canada conducts an open market purchase of $2000 from a commercial bank. Assuming all banks’ desired reserve ratio is 0.20, or 20 percent, and currency drain ratio is 0. Answer the questions below: a. Show the effects of open market operation on Bank of Canada’s balance sheet, and commercial bank’s balance sheet. b. By how much monetary base will increase? By how much money supply will increase? c. If banks’ desired reserve ratio increases...
Open-market sales by the Fed a. make the price level and value of money fall. b....
Open-market sales by the Fed a. make the price level and value of money fall. b. make the price level rise, and make the value of money fall. c. make the price level and make the value of money rise. d. make the price level fall, and make the value of money rise.
If the Bank of Canada makes an open market sale of $1 million of securities to...
If the Bank of Canada makes an open market sale of $1 million of securities to a bank, what initial changes occur in the economy? The bank's total assets ______, its reserves ______. A. are the same; decrease B. increase; increase C. decrease; decrease D.decrease; increase
To decrease the money supply, the Bank of Canada could O a) lower the bank rate....
To decrease the money supply, the Bank of Canada could O a) lower the bank rate. O b) lower the required reserve ratio. O c) sell government securities. d) purchase government securities. An increase in interest rate in the economy will have what effect on macroeconomic equilibrium in the long run? a) The price level will rise, and the level of output will fall. b) The price level will rise, and the level of output will be equal to the...
1.Suppose the Bank of Canada sells government bonds. Use a graph of the money market to...
1.Suppose the Bank of Canada sells government bonds. Use a graph of the money market to show what this does to the value of money. (6 marks) 2.Using separate graphs, demonstrate what happens to the money supply, money demand, the value of money, and the price level if: a. the Bank of Canada increases the money supply. b. people decide to demand less money at each value of money. 3.Economists agree that increases in the money supply growth rate increases...
1. Suppose the Bank of Canada sells government bonds. Use a graph of the money market...
1. Suppose the Bank of Canada sells government bonds. Use a graph of the money market to show what this does to the value of money. (6 marks) I 2. Using separate graphs, demonstrate what happens to the money supply, money demand, the value of money, and the price level if: a. the Bank of Canada increases the money supply. (6 marks)
Question #7 (Chapter 10) Suppose that the Bank of Canada implements an open market purchase of $100 of government bonds from the Royal Canadian Bank. (a) Illustrate with a T-Account the initial effect of the open market purchase on the Royal Canadian Bank's assets and liabilities Assets Liabilities + (b) Illustrate with a T-Account the effect of the open market purchase on the Bank of Canada's assets and liabilities Assets Liabilities (c) What is the initial change in the Monetary...
To decrease the money supply, the Bank of Canada could O a) lower the bank rate. O b) lower the required reserve ratio. O c) sell government securities. d) purchase government securities. An increase in interest rate in the economy will have what effect on macroeconomic equilibrium in the long run? a) The price level will rise, and the level of output will fall. b) The price level will rise, and the level of output will be equal to the...
1. Suppose the Bank of Canada sells government bonds. Use a graph of the money market to show what this does to the value of money. (6 marks) I 2. Using separate graphs, demonstrate what happens to the money supply, money demand, the value of money, and the price level if: a. the Bank of Canada increases the money supply. (6 marks)
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