The Major Purpose of the Bank of Canada Buying and Selling

question 86

Multiple Choice

The major purpose of the Bank of Canada buying and selling government securities in open market operations is to:

• A)achieve the desired interest rate.
• B)raise money for government spending.
• C)reduce the amount of government securities it holds.
• D)raise money for a future tax cut.

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Definitions:

Total Investment

Total investment refers to the sum of all expenditures on capital goods by businesses and government within a specific time period.

Keynesian Range

A segment of the aggregate supply curve where output can increase without an increase in price levels, related to Keynesian economics theories.

Full Capacity

The maximum level of output that a company can sustain over a period without increasing long-term costs, often achieved by optimizing the use of resources.

Equilibrium GDP

The level of Gross Domestic Product where aggregate supply equals aggregate demand within an economy.