If the Bank of Canada Enters the Open Market and Purchases

question 5

Multiple Choice

If the Bank of Canada enters the open market and purchases $1000 of government securities,what will be the eventual change in the money supply given a 10% target reserve ratio in the commercial banking system?

• A)decrease of $1000
• B)decrease of $5000
• C)decrease of $10 000
• D)increase of $5000
• E)increase of $10 000

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Definitions:

Cognitive Revolution

A period during the 1950s to 1970s marked by the adoption of a new approach to studying the mind, emphasizing internal mental processes.

Mental Processes

The internal cognitive operations that underlie human thought, including perception, memory, and decision-making.

Renewal

The process of being made new, fresh, or strong again; often used in the context of psychological recovery or environmental regeneration.

Cognitive Neuroscience

The interdisciplinary study of the brain activity linked with cognition (including perception, thinking, memory, and language).