Why Doesn't the Bank of Canada Have Both a Money

Multiple Choice

Why doesn't the Bank of Canada have both a money supply target and an interest rate target?

A) Short-term interest rates do not respond to changes in the money supply, which the Bank of Canada can control.
B) The Bank of Canada does not control money demand.
C) The Bank of Canada cannot offset the impact of changes in cash management by the public or changes in lending policies of commercial banks on the money supply.
D) Only the level of interest rates matters when we consider rates of growth in real GDP, employment, and rates of price inflation.
E) A money supply target and an interest rate target amount to the same thing.