Given Its Existing Policy Regime of "Inflation Targeting," the Bank

Multiple Choice

Given its existing policy regime of "inflation targeting," the Bank of Canada would likely react to a large positive aggregate demand shock by

A) lowering the bank rate.
B) buying bonds from the open market.
C) increasing its target for the overnight interest rate.
D) decreasing its target for the overnight interest rate.
E) ignoring the shock and allowing the economy to adjust.