The Decision by the Bank of Canada and Many Other

Multiple Choice

The decision by the Bank of Canada and many other central banks to target the rate of inflation partly reflects the evidence of the

A) link between the output gap and the money supply.
B) link between the money supply and the exchange rate.
C) power of the overnight lending rate to affect long-run investment.
D) long-run neutrality of money.
E) power of the overnight interest rate to affect consumer borrowing.