If the Bank of Canada Chooses to Expand the Money

question 77

Multiple Choice

If the Bank of Canada chooses to expand the money supply directly, it could

• A)sell some of its foreign currency assets.
• B)reduce its deposits at commercial banks.
• C)sell government securities on the open market.
• D)buy government securities on the open market.
• E)change the price level.

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Definitions:

Cost Method

An accounting method used to value investments, where the investment is recorded at cost and adjusted only for impairments.

Equity Method

An accounting technique used by a company to record its investment in another company when it has significant influence but does not have full control or majority ownership.

Income Tax Allocation

Refers to the process of assigning income tax expense or benefit to various components of an organization's financial statements.

Balance Sheet

A financial statement that shows a company's financial position at a specific point in time, detailing assets, liabilities, and shareholders' equity.