When interest rates decrease, banks will normally
A. increase lending, but decrease deposits and the money supply.
B. increase lending, deposits, and the money supply.
C. decrease lending, but increase deposits and the money supply.
D. decrease lending, deposits, and the money supply.
Answer: D
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Answer the following statement true (T) or false (F)
When the euro appreciated significantly against the U.S. dollar, European policymakers were concerned.To stop the appreciation of the euro, the European Central Bank could have adopted a macroeconomic policy that:
A. reduced the supply of euros but increased the demand. B. reduced both the supply and demand for euros. C. increased both the supply and the demand for euros. D. reduced the demand for euros but increased the supply.
Monetary policymakers face a tradeoff between:
A. the level of output and the rate of inflation. B. the volatility in output and the volatility in inflation. C. high unemployment and low inflation. D. low unemployment and high inflation.