Using the information provided please answer Part D

As a manager of a firm, you are concerned about a potential increase in interest rates, which would reduce the demand for your firm's product. Assume that the Bank of Canada is scheduled to announce its monetary policy report in one week. In the Bank's previous monetary policy report, it announced an increase in its policy interest rate. Over the last six months, economic growth has been high, but inflation has also been high. d. Suppose that the Bank of Canada has just learned that the Treasury will need to borrow a larger amount of funds than originally expected. Explain how this information may affect the degree to which the Bank of Canada changes the monetary policy