One Reason the Bank of Canada Does Not Try to Influence

Multiple Choice

One reason the Bank of Canada does not try to influence the money supply directly is that

A) the Bank of Canada has many other policy tools with which it can influence aggregate demand.
B) the Bank of Canada does not have the mandate to change the money supply.
C) because the money demand curve is almost horizontal,changes in the money supply would have little or no effect on the interest rate.
D) because the investment demand curve is almost vertical,any change in the interest rate resulting from a change in money supply would have little or no effect on desired investment expenditure.
E) the slope of the money demand curve is not precisely known,and so the effect on the interest rate of a change in money supply is uncertain.