How Does the Bank of Canada Conduct Open-Market Transactions

question 106

Multiple Choice

How does the Bank of Canada conduct open-market transactions?

• A) It prints new currency.
• B) It buys or sells government bonds from or to the public.
• C) It lowers the bank rate.
• D) It increases its lending to chartered banks.

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Definitions:

Utility Function

A mathematical representation of a consumer's preference ranking for bundles of goods or services measured in terms of utility.

Consumer's Surplus

The disparity between the amount customers are prepared to spend on a product or service and the actual price they pay.

Earplugs

A device inserted in the ear canal to protect the ears from loud noises, water, or foreign bodies.

Utility Function

A mathematical representation of a consumer's preference orderings over a set of goods and services.