An open market purchase is where the Bank of Canada

Select one:

a. purchases government bonds from the public, thereby decreasing the money supply

b. decreases the money supply by selling government bonds to the public

c. purchases government bonds from the public, thereby increasing the money supply

d. increases the money supply by selling government bonds to the public

The real exchange rate depends on

Select one:

a. the nominal exchange rate and the prices of goods in the two countries

b. domestic consumption

c. the volume of services exchanged

d. fiscal policy

Net foreign investment refers to

Select one:

a. the purchase of foreign assets by domestic residents minus the purchase of domestic assets by foreign residents

b. the purchase of domestic assets by domestic residents minus the purchase of foreign assets by foreign residents

c. none of the choices

d. investment minus saving

When the price level falls,

Select one:

a. households need to hold less money to buy the goods and services they want

b. households need to save more money for the future

c. households need to hold more money to buy the goods and services they want

d. households need to spend more money to buy the goods and services they want