When the Bank of Canada sells a Canadian government bond, what are the effects on the volume of loans issued by the banking system and on investment? a. The volume of loans issued by the banking system increases, and investment tends to increase. b. The volume of loans issued by the banking system increases, and investment tends to decrease. c. The volume of loans issued by the banking system decreases, and investment tends to increase. d. The volume of loans issued by the banking system decreases, and investment tends to decrease.
When the Bank of Canada sells a Canadian government bond, what are the effects on the volume of loans issued by the banking system and on investment? a. The volume of loans issued by the banking system increases, and investment tends to increase. b. The volume of loans issued by the banking system increases, and investment tends to decrease. c. The volume of loans issued by the banking system decreases, and investment tends to increase. d. The volume of loans issued by the banking system decreases, and investment tends to decrease.
Chapter19: Money Creation
Section: Chapter Questions
Problem 1SQ
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When the Bank of Canada sells a Canadian government bond, what are the effects on the volume of loans issued by the banking system and on investment?
a. The volume of loans issued by the banking system increases, and investment tends to increase.
b. The volume of loans issued by the banking system increases, and investment tends to decrease.
c. The volume of loans issued by the banking system decreases, and investment tends to increase.
d. The volume of loans issued by the banking system decreases, and investment tends to decrease.
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