The Bank of Canada does not target both the money supply and an interest rate because
A) it would be too confusing to Bay Street and would disrupt the financial markets.
B) it would be too easy for Bay Street to determine what policy the Bank of Canada is following and this would destabilize the economy.
C) it would be illegal according to the Bank Act.
D) the Bank of Canada cannot achieve a target for both the money supply and an interest rate at the same time.
E) such a policy would put the Bank of Canada in conflict with the Office of the Superintendent of Financial Institutions.
Correct Answer:
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