Why Was Changing of Reserve Requirements Phased Out as a Tool

question 86

Multiple Choice

Why was changing of reserve requirements phased out as a tool used by the Bank of Canada to control the money supply?

• A) to make the rules the same for all financial institutions since only credit unions were required to hold reserves
• B) to make the rules the same for all financial institutions since only commercial banks were required to hold reserves
• C) because Canada was the only country still imposing reserve requirements on its financial institutions
• D) because the Bank of Canada was using it too frequently, causing disruption in the banks

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