Question 15The effect of an open market purchase on reserves differs depending on how the seller of the bonds keeps the proceeds. If theproceeds are kept in currency, the open market purchasemarket purchasereserves; if the proceeds are kept as deposits, the openreserves.O has no effect on: IncreasesO decreases increasesO has no effect on; has no effect onO increases: has no effect onQuestion 16If a member of the nonbank public purchases a government bond from the Bank of Canada in exchange for currency, themonetary base willbut reserves willO rise remain unchangedO fall, remain unchangedO rermain unchanged, fallO reman uncharged rise

Open market operations (OMO) are when a central bank buys or sells short-term Treasury and other…

The effect of an open market purchase on reserves differs depending on how the seller of the bonds keeps the proceeds. If the procneds are kept in currency, the open market purchase market purchase reserves; if the proceeds are kept as deposits, the open reserves.

The effect of an open market purchase on reserves differs depending on how the seller of the bonds keeps the proceeds. If the procneds are kept in currency, the open market purchase market purchase reserves; if the proceeds are kept as deposits, the open reserves.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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