Bank Lending and Deposits Tend to Change as Interest Rates

Multiple Choice

Bank lending and deposits tend to change as interest rates change.Can the Fed counteract this tendency?

A) Yes, through its ability to affect the money supply.
B) Yes, through its ability to change tax levels.
C) No, the Fed is forbidden by the Constitution from intervening in the economy.
D) No, the Fed almost always follows a passive monetary policy.