Suppose the Bank of Canada Releases a Policy Statement Today

Multiple Choice

Suppose the Bank of Canada releases a policy statement today which leads people to believe that the Bank will be enacting expansionary monetary policy in the near future. Everything else held constant, the release of this statement would immediately cause the demand for Canadian assets to ________ and the Canadian dollar to ________.

A) increase; appreciate
B) decrease; appreciate
C) increase; depreciate
D) decrease; depreciate