a. (10 points) The governors of the Bank of Canada BC make two claims: Claim 1: "They can stabilize economic activity and control inflation by controlling the overnight interest rate". Claim 2: "Forces of demand and supply determine the equiliorium overnight interest rate". The two claims at best seem contradictory. On the one hand, they are themselves in control of economic activity. On the other hand, forces of demand and supply determine the overnight interest rate and thus the governors cannot control economic activity How do you reconcile the two claims in view of the fact the inffation rate spiraled out of control of the governors of the central banks of all developed and developing countries despite the enormous amount of information available to them and the sophisticated economic models and large research departments that the governors of every central bank have under their supervision? b. (5 points) The US Federal Reserve Board governors use open market operations to achieve the goals of their monetary policy. What do the governors of the Bank of Canada use to achieve the goals of their monetary policy? Do they also use open market operations and only open market operations and why