11-03-29-Analysis of an Open Market Operation-Revised Again-a

11-03-29-Analysis of an Open Market Operation-Revised Again-a

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Analysis Of An Open Market Operation March 24, 2011
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Money-Supply Analysis When a shock hits the domestic money- supply system, we record the initial effects in red . This includes all cheque-clearing, such that balance sheets balance. In response various actors make further transactions. These are shown in green. The new equilibrium is shown in blue .
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An Open Market Operation The Bank of Canada buys $1 billion of Government Of Canada bonds from the private sector, and provides cheques drawn on itself to pay for them. The Public deposits these cheques into its accounts with Chartered Banks. They, in turn, deposit these cheques into their own accounts at the Bank of Canada.
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We Start With The Bank Of Canada’s Balance Sheet, And How The Cheque- Clearing Affects The Entries In It. The Reason That BoC Conducted An Expansionary Open Market Operation Was To Increase The Size Of The Monetary Base By An Equal Amount. This Is Shown By The Increase In Bank
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11-03-29-Analysis of an Open Market Operation-Revised Again-a

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