Which of the Following Best Describes the Process of Open

question 32

Multiple Choice

Which of the following best describes the process of open market purchases conducted by the Bank of Canada?

• A)The Bank of Canada buys Treasury bills, which increases the money supply.
• B)The Bank of Canada buys Treasury bills, which decreases the money supply.
• C)The Bank of Canada borrows from member banks, which increases the money supply.
• D)The Bank of Canada lends money to member banks, which decreases the money supply.

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Definitions:

Inventory Turnover Ratio

A measure of how frequently a company sells and replaces its inventory over a certain period; calculated as cost of goods sold divided by the average inventory.

Inventory Turnover Ratios

A financial metric indicating the number of times a company’s inventory is sold and replaced over a specified period, critical for evaluating inventory efficiency.

Quick Ratios

A financial metric used to gauge a company's liquidity by comparing its most liquid assets, without inventory, to its current liabilities.

Current Ratios

A financial metric used to measure a company's ability to pay its short-term obligations with its current assets.