Which of the Following Statements Is Not Correct

question 97

Multiple Choice

Which of the following statements is not correct?

• A)The supply of money decreases when the Bank of Canada buys government securities from households or businesses.
• B)Excess reserves are the amount by which actual reserves exceed desired reserves.
• C)Chartered banks increase the supply of money when they purchase government bonds from households or businesses.
• D)Chartered bank reserves are an asset to chartered banks but a liability to the Bank of Canada.

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Definitions:

Long-Term Investments

Assets that a company intends to hold for more than one year, such as stocks, bonds, or real estate.

Statement of Cash Flows

A financial report detailing the impact of variations in balance sheet accounts and income on cash and cash equivalents.

Direct Method

An accounting method used in the cash flow statement to show the specific sources of operating cash receipts and payments, contrasting with the indirect method.

Investing Activities

Transactions involving the purchase and sale of long-term assets and investments, a component of a company's cash flow statement.