Assume the Unemployment Rate Is Currently at the Natural Rate

Assume the unemployment rate is currently at the natural rate of 7%. The actual inflation rate is 2% and has been 2% for year. Further workers and firms believe the inflation rate will remain 2% in the future. If the Bank of Canada decides to increase the inflation rate to 5%, how could the Bank of Canada achieve this objective?

A) Reducing the target for the overnight rate, reducing unemployment below its natural rate until expectations of workers and firms adapt to the new objective.
B) Increasing the target for the overnight rate, increasing unemployment above its natural rate until expectations of workers and firms adapt to the new objective.
C) Entering into sale and repurchase agreements with savers.
D) Expanding government spending to stimulate the stalled economy.
E) Require commercial banks to hold a higher level of deposits as reserves and imposing stricter lending standards the Bank of Canada can increase the rate of inflation safely.