If the Annual Inflation Rate Is 0

Multiple Choice

If the annual inflation rate is 0.5 percent, the Bank of Canada will

A) sell bonds to raise interest rates and slow down the economy.
B) buy bonds to lower interest rates and accelerate the economy.
C) do nothing since an inflation rate of 0.5 percent is desirable.
D) buy bonds to raise interest rates and increase aggregate demand.
E) sell bonds to lower interest rates and increase aggregate demand.