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Alena Grigore Alena Grigore
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Posts: 12
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3 years ago
If the Bank of Canada buys bonds on the bond market, all of the following happen except
Question 12 options:

A)business investment increases.

B)the overnight rate rises.

C)the supply of money increases.

D) net exports increase.

E) bank reserves increase.
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Educator
3 years ago
If the Bank of Canada buys bonds in the open market, the present value of the bond will increase and the interest rate will increase. I believe this in turn expands the money supply, so maybe (C), what do you think?
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