Multiple Choice
Which statement best describes the effects of an open-market operation undertaken by the Bank of Canada?
A) If the Bank of Canada purchases bonds in the open market, then the money supply shifts right and the price level increases.
B) If the Bank of Canada sells bonds in the open market, then the money supply shifts right and the price level decreases.
C) If the Bank of Canada purchases bonds in the open market, then the money supply shifts left and the price level decreases.
D) If the Bank of Canada sells bonds in the open market, then the money supply shifts left and the price level increases.
Correct Answer:
Verified
Correct Answer:
Verified
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