Which Statement Best Describes the Effects of an Open-Market Operation

question 20

Multiple Choice

Which statement best describes the effects of an open-market operation undertaken by the Bank of Canada?

• A) If the Bank of Canada purchases bonds in the open market, then the money supply shifts right and the price level increases.
• B) If the Bank of Canada sells bonds in the open market, then the money supply shifts right and the price level decreases.
• C) If the Bank of Canada purchases bonds in the open market, then the money supply shifts left and the price level decreases.
• D) If the Bank of Canada sells bonds in the open market, then the money supply shifts left and the price level increases.

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Definitions:

Iliopsoas

A composite muscle comprised of the iliacus and psoas major muscles; it is critical for flexing the hip and bending the trunk.

Sartorius

The longest muscle in the human body, running from the hip to the knee, assisting in flexing, abduction, and lateral rotation of the thigh.

Dura Mater

The outermost, tough layer of the meninges that envelops the brain and spinal cord, providing protection.

Meninx

Meninx (plural, meninges) refers to one of the three membranes (the dura mater, arachnoid mater, and pia mater) that cover the brain and spinal cord.