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% 20% 2% MD (P,Y) MD (P,Y) MI 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. The Bank of Canada must be able to easily communicate its monetary policy actions to the public. Which approach is more amenable to this requirement, and why? Select one: O a. Part (ii) - targeting the money supply: because an announcement of a 1%% decrease in the money supply is more easily understood than an increase in the interest rate. O b. Part (ii) - targeting the money supply: because the public can more easily understand that a decrease in reserves in the banking system makes it more difficult to get a loan or mortgage. O c. Part (i) - targeting the interest rate: because changes in the interest rate are much more meaningful and understandable to the public than changes in the money supply. O d. Part (i) - targeting the interest rate: because the Bank of Canada can more easily instruct the commercial banks to raise their interest rates