If the Bank of Canada pursues a contractionary monetary policy,interest rates in Canada will
A) rise,there will be a capital outflow,and the Canadian dollar will depreciate.
B) rise,there will be a capital inflow,and the Canadian dollar will appreciate.
C) fall,there will be a capital inflow,and the Canadian dollar will depreciate.
D) fall,there will be a capital outflow,and the Canadian dollar will appreciate.
E) fall,there will be a loss in official reserves at the Bank of Canada,and the Canadian dollar will depreciate.
Correct Answer:
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