In the Simple Deposit Expansion Model, a Decline in Chequable

question 101

Multiple Choice

In the simple deposit expansion model, a decline in chequable deposits of $500 when the desired reserve ratio is equal to 10 percent implies that the Bank of Canada ________.

• A) sold $500 in government bonds
• B) sold $50 in government bonds
• C) purchased $50 in government bonds
• D) purchased $500 in government bonds

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