Question: 1- Write answers in your own words. ( 5 Marks) Suppose that changes in bank regulations expand the availability of credit cards so that people

1- Write answers in your own words. ( 5 Marks)

Suppose that changes in bank regulations expand the availability of credit cards so that people need to hold less cash.

A) How does this event affect the demand for money?B) B) If the Bank of Canada does not respond to this event, what will happen to the price level?C) C) If the Bank of Canada wants to keep the price level stable, what should it do?

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