Suppose the Bank of Canada Raises Its Target for the Overnight

Multiple Choice

Suppose the Bank of Canada raises its target for the overnight interest rate from 3% to 3.25%,while interest rates in other countries do not change.The result will be

A) an inflow of financial capital,a decrease in demand for Canadian dollars,and a depreciation of the Canadian dollar.
B) an inflow of financial capital,an increase in demand for Canadian dollars,and a depreciation of the Canadian dollar.
C) an inflow of financial capital,an increase in demand for Canadian dollars,and an appreciation of the Canadian dollar.
D) an outflow of financial capital,an increase in demand for Canadian dollars,and an appreciation of the Canadian dollar.
E) an outflow of financial capital,a decrease in demand for Canadian dollars,and a depreciation of the Canadian dollar.