Multiple Choice
Why is the money supply curve almost perfectly inelastic?
A) As interest rates rise, people will want to be supplied with more loans.
B) The Bank of Canada makes more money available in response to higher interest rates.
C) The Bank of Canada lowers the bank rate as interest rates rise so that more money is injected in the banking system.
D) Banks generally find loans more profitable than keeping their assets as cash in their vaults or reserve deposits at the Bank of Canada
Correct Answer:

Verified
Correct Answer:
Verified
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