Assume That the Bank of Canada's Policy Is to Keep

Multiple Choice

Assume that the Bank of Canada's policy is to keep the price level from either rising or falling.If aggregate supply increases in the economy, the Bank of Canada:

A) will have to increase interest rates to keep the price level from falling.
B) will have to reduce the money supply to keep the price level from rising.
C) will have to increase the money supply to keep the price level from falling.
D) can keep the price level stable without altering the money supply or interest rate.