Which of the Following Is Correct? When the Bank of Canada

question 58

Multiple Choice

Which of the following is correct? When the Bank of Canada buys bonds on the open market, the money supply:

• A)contracts and chartered bank reserves increase.
• B)expands and chartered bank reserves decrease.
• C)contracts and chartered bank reserves decrease.
• D)expands and chartered bank reserves increase.

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Definitions:

Consensus

A form of collective agreement where all members of a group support a decision even if it may not be their first choice, ensuring that everyone's opinion is considered.

Self-Serving Bias

is the common human tendency to attribute positive outcomes to one's own character or behaviors but blame outside factors for negative outcomes.

Fundamental Attribution Error

A psychological bias where people tend to attribute others' behavior too much to internal or personal factors and too little to situational factors.

Conditioned Stimulus

In classical conditioning, a previously neutral stimulus that, after being paired with an unconditioned stimulus, elicits a conditioned response.