Which Statement Best Describes the Impact of Open-Market Purchases by the Bank

question 61

Multiple Choice

Which statement best describes the impact of open-market purchases by the Bank of Canada?

• A) The money supply and the value of money increase.
• B) The money supply increases, which makes the value of money decrease.
• C) The money supply and the value of money decrease.
• D) The money supply decreases, which makes the value of money increase.

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Definitions:

Depreciation Expense

An accounting method that allocates the cost of a tangible asset over its useful life, reflecting its consumption or wear and tear.

U.S. GAAP

Generally Accepted Accounting Principles in the United States, a standard framework of guidelines for financial accounting used in any jurisdiction.

Financial Statements

Formal records of the financial activities and position of a business, person, or other entity, presenting the financial results of its operations.

Journal Entry

A record in accounting that represents a transaction in which there has been a change in the value of the company's assets, liabilities, or equity.