When the Bank of Canada Decreases Bank's Reserves Through an Open-Market

question 199

Multiple Choice

When the Bank of Canada decreases bank's reserves through an open-market operation:

• A) deposits increase,currency in circulation increases,and the monetary base remains the same.
• B) the monetary base decreases,the money multiplier decreases,and the money supply increases.
• C) loans increase,the overnight rate rises,and the bank rate rises.
• D) the monetary base decreases,loans decrease,and the money supply decreases.

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Definitions:

Welfare System

A government program that provides financial aid and services to support individuals and families in need, aiming to meet basic human needs and promote social well-being.

Oslo Accords

A set of agreements signed in the 1990s between Israel and the Palestine Liberation Organization (PLO) aimed at achieving a peace process.

Middle East

The Middle East is a geopolitical region centered on Western Asia and Egypt, characterized by its strategic economic, political, and cultural importance and its history as a cradle of civilization.

Peace

A state or condition where there is no war, conflict, or violence within a country or between countries, allowing for stability and safety for communities and individuals.