When the Bank of Canada Enters the Open Market and Buys

question 42

Multiple Choice

When the Bank of Canada enters the open market and buys or sells government securities,we refer to this as

• A)monetary policy.
• B)commercial lending.
• C)changing the target reserve ratio.
• D)setting the target ratio.
• E)open-market operations.

---

Definitions:

Subsidies

Government support for industries.

Tax Breaks

Financial incentives in the form of reduced tax rates, deductions, or credits, designed to encourage certain economic activities or investments.

Low-Interest Loans

Loans offered with a lower than average interest rate, making them more affordable for the borrower.

Subsidy

A financial contribution granted by the government to support or promote economic activities.