The diagrams below illustrate two alternative approaches to implementing monetary policy. The economy begins in monetary equilibrium with the interest rate equal to 2" and the money supply equal to my". Interest Rate Interest Rate 3% 3% 2% 2% ~MD (P,Y) -MD (P,Y) M MO MI MO Quantity of Money Quantity of Money part (1) - targeting the interest rate part (ii) - targeting the money supply FIGURE 28-1 Refer to Figure 28-1. If the Bank of Canada raises the target interest rate to 3%%, as shown in part (i), then it must accommodate the resulting in quantity of money demanded by in financial markets. Select one: a. decrease; buying government securities O b. increase; buying government securities O c. decrease; selling government securities O d. increase; selling government securities