Suppose the Bank of Canada Announces Plans to Issue $50

Multiple Choice

Suppose the Bank of Canada announces plans to issue $50 billion of new bonds. Assuming the announcement was NOT expected, what effect, other things held constant, would that have on bond prices and interest rates?

A) Prices and interest rates would both rise.
B) Prices would decline and interest rates would rise.
C) Prices and interest rates would both decline.
D) Prices would rise and interest rates would decline.