If a Central Bank Targets the Interest Rate, What Does

Multiple Choice

If a central bank targets the interest rate, what does this imply?

A) The central bank can then set the money supply at whatever value it wants.
B) The central bank must increase the money supply if the interest rate is above its target.
C) The central bank must decrease the money supply if the interest rate is above its target.
D) The central bank must not change the money supply.