The Purchase of Government Securities from the Public by the Bank

question 94

Multiple Choice

The purchase of government securities from the public by the Bank of Canada will cause:

• A)chartered bank reserves to increase.
• B)the money supply to increase.
• C)demand deposits to increase.
• D)all of the above to occur.

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Definitions:

Labor Demand

The total quantity of workers that employers want to hire at a given wage rate, reflecting how employment levels vary with changes in wage or the economic output.

Nominal Wage

The wage measured in current money or monetary units, without adjusting for inflation.

Real Wage

Wages adjusted for inflation, reflecting the actual purchasing power of income earned from labor.

Inflation

The tempo at which the aggregate cost of goods and services ascends, depleting the power of purchase.