If the Bank of Canada Attempts to Continue Reducing Unemployment

Multiple Choice

If the Bank of Canada attempts to continue reducing unemployment by manipulating monetary policy, which of the following would you expect to see?

A) The Bank of Canada's policies will be deflationary.
B) The Bank of Canada's policies will be inflationary.
C) The rate of inflation will fall as the Bank of Canada tries to reduce the unemployment rate.
D) The Bank of Canada will reduce the natural rate of unemployment.
E) The Bank of Canada will be become increasingly effective over time.