question archive An open-market operation is where the Bank of Canada A
An open-market operation is where the Bank of Canada A
Subject:EconomicsPrice:2.88 Bought3
An open-market operation is where the Bank of Canada
A. issues new currency.
B. buys government bonds from the public.
C. sells government bonds to the public.
D. Both b and c are open market operations.
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The correct answer is (D).
Selling and buying government bonds through the bank of Canada in an open market is known as an open market operation. Buying or selling securities in Canada is a way of influencing the supply of money. For instance, through the sale of securities, the government aims at reducing the supply of money. Due to that effect, interest rates increases.
