In the Simple Deposit Expansion Model, an Expansion in Chequable

question 73

Multiple Choice

In the simple deposit expansion model, an expansion in chequable deposits of $1000 when the desired reserve ratio is equal to 20 percent implies that the Bank of Canada ________.

• A) sold $200 in government bonds
• B) sold $500 in government bonds
• C) purchased $200 in government bonds
• D) purchased $500 in government bonds

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Definitions:

Ginger Snap

A type of biscuit made with ginger and other spices, known for its crispy texture and spicy-sweet flavor.

Chocolate Chip Cookie

A popular baked dessert or snack made from dough that includes chocolate chips as a primary ingredient.

Barter

A system of exchange where goods or services are directly exchanged for other goods or services without using a medium of exchange, like money.

Directly Exchanged

A situation where goods or services are exchanged without the use of money as an intermediary.