If the Bank of Canada Buys Government Securities in Open

Multiple Choice

If the Bank of Canada buys government securities in open market operations, what is the likely effect?

A) an increase in the overall money supply and increased economic activity
B) less money for banks to lend customers leading to an economic slowdown
C) a decrease in the overall money supply and higher prices on goods and services
D) a rapid increase in the amount of loans consumers take leading to increased economic activity