When interest rates increase, 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.
b
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If an individual receives $10,000 after two years by investing $10,000 today, we can conclude that ________
A) the rate of inflation is zero B) the market rate of interest is zero C) the rate of inflation is negative D) the market rate of interest is negative
Those who favor passive policy making argue that all of the following exist EXCEPT
A) perfectly flexible wages and prices. B) the trade off between inflation and unemployment is not stable in the short run and is non-existent in the long run. C) pure competition is typical. D) aggregate demand shocks can influence real GDP and unemployment.
If the expected rate of return decreases
A. The demand for loanable funds will increase. B. The demand for loanable funds will decrease. C. The time value of money will increase. D. Market participants will save less money.
A firm charged with monopolizing a market is less likely to be convicted if:
A. the court accepts a broad definition of the market. B. the court accepts a narrow definition of the market. C. it has gained its monopoly through abusive means. D. it sells its product to other firms, rather than directly to consumers.