Homework Answers
It is done through market open market operations in which there are generally two type of policies-
Expansionary monetary policy and
Contractionary monetary policy
When the bank of Canada wants to increase the money supply then it has to adopt expansionary monetary policy by purchasing the government securities and this will lead to more flow of the money in the economy because interest rate is lowered to the commercial banks
It causes decrease the reserves of the commercial banks because the commercial banks also lends it general public to increase money supply and boots spending
when the central bank goal is to reduce the money supply then it sells the government securities
Hence the answer is option C
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When the Bank of Canada wants to expand the money supply, it_ government securities, which the...
14. a. If the Bank of Canada wanted to decrease the money supply, the Bank would...
14. a. If the Bank of Canada wanted to decrease the money supply, the Bank would buys bonds from the Chartered Banks. (Primary dealers) b. decreases the fixed operating band for overnight lending. decreases the bank rate. d. sells government securities to the Chartered Banks. (Primary dealers) provides more loans to the Chartered Banks through the Standing Liquidity Facility. c. e. 15. The Bank of Canada purchases $5 million worth of government securities (government bonds) from the Chartered Banks. The...
If the Bank of Canada purchases $97 million worth of Canada bonds from the public, the...
If the Bank of Canada purchases $97 million worth of Canada bonds from the public, the money supply will banks' reserves and which increase since sellers of these securities will causes banks to typically loan withdraw funds from banks, deposit funds in banks, decrease consumption spending increase consumption spending, If the Bank of Canada purchases $97 million worth of Canada bonds from the public, the money supply will banks' reserves and increase since sellers of these securities will which causes...
4- When the Fed conducts open-market sales, a. it sells Treasury securities, which decreases the money...
4- When the Fed conducts open-market sales, a. it sells Treasury securities, which decreases the money supply. b. it lends money to member banks, which decreases the money supply. c. it borrows from member banks, which increases the money supply. d. it sells Treasury securities, which increases the money supply. 5- When the government levies a $100 million tax on people's income and puts the $100 million back into the economy in the form of a spending program such as new...
A chartered bank sells securities to the Bank of Canada for $100,000. The money supply: increases...
A chartered bank sells securities to the Bank of Canada for $100,000. The money supply: increases by $100,000. decreases by $100,000, is unaffected by the transaction.
1.The Fed purchases $100,000 of U.S. government securities from One Bank. Assuming the desired reserve ratio...
1.The Fed purchases $100,000 of U.S. government securities from One Bank. Assuming the desired reserve ratio is 10 percent, banks loan all excess reserves, and the currency drain is 20 percent, how much does the quantity of money increase? A. $1,000,000 B. $10,000,000 C. $1,100,000 D. $900,000 E. $100,000 2.A bank maximizes its stockholders' wealth by ______. A. colluding with other banks to keep interest rates high colluding with other banks to keep interest rates high B. lending for long...
Back to Aset Attempts: Average: 2 2. The Bank of Canada and the money supply Suppose...
Back to Aset Attempts: Average: 2 2. The Bank of Canada and the money supply Suppose the money supply (as measured by chequable deposits) is currently $900 billion. The required reserve ratio is 30%. Banks hold $270 billion in reserves, so there are no excess reserves. The Bank of Canada wants to increase the money supply by $10 billion, to $910 billion. It could do this through open-market operations or by changing the required reserve ratio. Assume for this question...
If the reserve ratio decreased from 20 percent to 10 percent, which of the following would...
If the reserve ratio decreased from 20 percent to 10 percent, which of the following would happen to the money multiplier? a. It would rise from 10 to 20. b. It would rise from 5 to 10. c. It would fall from 10 to 5. d. It would fall from 20 to 5. 13. Which statement best describes the outcome of a decrease in the bank rate? a. Banks will borrow less from Bank of Canada, so reserves increase. b....
When the Fed sells government securities to a bank, how are the Fed's assets affected? OA....
When the Fed sells government securities to a bank, how are the Fed's assets affected? OA. The amount of reserves held at the Fed decreases B. The amount of reserves held at the Fed increases C. The amount of the Fed's government securities increases D. The amount of the Fed's government securities decreases. Click to select your answer.
Question 44 (1 point) Assume that, in the process of an open market operation, the Bank...
Question 44 (1 point) Assume that, in the process of an open market operation, the Bank of Canada buys $100 billion worth of government bonds of chartered banks. Assuming the desired reserve ratio is 20%, in this process, a) Bank of Canada's assets increase by $100b. b) Bank of Canada's assets decrease by $100b. c) chartered banks' deposits at the Bank of Canada decrease by $100b. d) chartered banks' deposits at the Bank of Canada increase by $100b. e) chartered...
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
14. a. If the Bank of Canada wanted to decrease the money supply, the Bank would buys bonds from the Chartered Banks. (Primary dealers) b. decreases the fixed operating band for overnight lending. decreases the bank rate. d. sells government securities to the Chartered Banks. (Primary dealers) provides more loans to the Chartered Banks through the Standing Liquidity Facility. c. e. 15. The Bank of Canada purchases $5 million worth of government securities (government bonds) from the Chartered Banks. The...
If the Bank of Canada purchases $97 million worth of Canada bonds from the public, the money supply will banks' reserves and which increase since sellers of these securities will causes banks to typically loan withdraw funds from banks, deposit funds in banks, decrease consumption spending increase consumption spending, If the Bank of Canada purchases $97 million worth of Canada bonds from the public, the money supply will banks' reserves and increase since sellers of these securities will which causes...
Back to Aset Attempts: Average: 2 2. The Bank of Canada and the money supply Suppose the money supply (as measured by chequable deposits) is currently $900 billion. The required reserve ratio is 30%. Banks hold $270 billion in reserves, so there are no excess reserves. The Bank of Canada wants to increase the money supply by $10 billion, to $910 billion. It could do this through open-market operations or by changing the required reserve ratio. Assume for this question...
When the Fed sells government securities to a bank, how are the Fed's assets affected? OA. The amount of reserves held at the Fed decreases B. The amount of reserves held at the Fed increases C. The amount of the Fed's government securities increases D. The amount of the Fed's government securities decreases. Click to select your answer.
Question 44 (1 point) Assume that, in the process of an open market operation, the Bank of Canada buys $100 billion worth of government bonds of chartered banks. Assuming the desired reserve ratio is 20%, in this process, a) Bank of Canada's assets increase by $100b. b) Bank of Canada's assets decrease by $100b. c) chartered banks' deposits at the Bank of Canada decrease by $100b. d) chartered banks' deposits at the Bank of Canada increase by $100b. e) chartered...
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