How Might a Canadian Federal Budget Surplus Affect the Balance

How might a Canadian federal budget surplus affect the balance of trade? (Assume exchange rates are stated in terms of foreign currency per Canadian dollar.)

A) A federal budget surplus raises interest rates, which raises exchange rates and increases the balance of trade.
B) A federal budget surplus raises interest rates, which raises exchange rates and reduces the balance of trade.
C) A federal budget surplus reduces interest rates, which raises exchange rates and reduces the balance of trade.
D) A federal budget surplus reduces interest rates, which reduces exchange rates and increases the balance of trade.
E) A federal budget surplus reduces interest rates, which raises exchange rates and increases the balance of trade.