Why Would Canadian Monetary Policy Be Ineffective If We Fixed

Multiple Choice

Why would Canadian monetary policy be ineffective if we fixed the value of our dollar to that of the U.S.dollar?

A) Expanding the money supply in Canada would crowd out investment spending.
B) Contracting the money supply in Canada would crowd out investment spending.
C) Expanding the money supply in Canada would cause a rise in interest rates and an outflow of Canadian dollars and thereby frustrate the money expansion.
D) Expanding the money supply in Canada would cause a fall in interest rates and an outflow of Canadian dollars and thereby frustrate the money\expansion.