If the Bank of Canada Enters the Open Market and Sells

question 101

Multiple Choice

If the Bank of Canada enters the open market and sells $1000 of government securities,what will be the eventual change in the money supply if commercial banks lend out all excess reserves and they have a 2.5% target reserve ratio?

• A)decrease of $40 000
• B)decrease of $4000
• C)increase of $40 000
• D)increase of $4000
• E)decrease of $25 000

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Definitions:

Phenomena

Observable events or subjects, especially those that are interesting or unusual.

Organizers

Individuals or tools that arrange, coordinate, or manage various tasks or events.

Object Relations

A theory in psychoanalysis that focuses on the importance of early family relationships and the roles of internalized images of these relationships in personality development.

Caregivers

Individuals who provide care for another person in need, such as children, elderly, or someone with disabilities, often involving physical, emotional, or financial support.