Explain How Each of the Following Actions Changes the Money

question 191

Essay

Explain how each of the following actions changes the money supply.
a. The Bank of Canada buys bonds.
b. The Bank of Canada raises the bank rate.
c. The Bank of Canada raises the reserve requirement.

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Definitions:

Current Ratio

A financial metric indicating a firm's capacity to fulfill its short-term debts, which are obligations due within the next year, by dividing its current assets by its current liabilities.

Debt Ratio

A financial ratio that measures the proportion of a company's total debt to its total assets, indicating the company's leverage level.

Inventory Turnover in Days

A metric that calculates the number of days it takes for a company to sell through its entire inventory, indicating the efficiency of inventory management.

Acid-Test Ratio

A liquidity ratio that measures a company's ability to pay off its current liabilities with quick assets, excluding inventory.