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When the Bank of Canada Sells Canadian Government Securities to a Chartered

Question 23

Multiple Choice

When the Bank of Canada sells Canadian government securities to a chartered bank, what is the immediate effect on that bank's balance sheet?  


A)  a decrease in assets, and an increase in liabilities 
B)  an increase in assets, and a decrease in liabilities 
C)  an increase in assets, and an increase in liabilities 
D)  a change in the type of assets the bank is holding, but no change in the type of liabilities

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