Which of the Following Will Not Happen When the Bank

question 83

Multiple Choice

Which of the following will not happen when the Bank of Canada buys bonds from the public in the open market?

• A)The desired reserve ratio will increase.
• B)The money supply will increase.
• C)The deposits of chartered banks will increase.
• D)Chartered bank reserves will increase.

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Definitions:

Cash Dividend

A payment made by a company to its shareholders, usually as a distribution of profits.

Net Income

The total profit or loss of a company after all revenues, expenses, and taxes have been accounted for, typically reported on an income statement.

Trading Securities

Financial securities that are purchased by a company not for long-term investment but rather for the purpose of selling them in the short term to generate profit.

Fair Value

Fair value is an estimate of the market value of an asset or liability, based on current prices in an active market or through valuation techniques.