Multiple Choice
Assume that the desired reserve ratio for the chartered banks is 25 percent.If Bank of Canada buys $3 billion in government securities from chartered banks we can say that, as a result of this transaction, the lending ability of the chartered banking system will:
A) decrease by $9 billion.
B) increase by $9 billion.
C) increase by $15 billion.
D) increase by $12 billion.
Correct Answer:
Verified
Correct Answer:
Verified
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