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:

Induction Procedure

A medical or experimental procedure performed to initiate a certain condition or response, such as labor in childbirth or an experimental condition in research.

Altered State

A mental state or consciousness different from the normal waking condition, which can be achieved through various methods such as meditation, drug use, or hypnosis.

Muscle Tension

The condition where muscles remain semi-contracted for an extended period, often as a response to stress or physical exertion.

CAM

Complementary and Alternative Medicine, which refers to medical products and practices that are not part of standard medical care.