If the Fed Decreases the Required Reserve Ratio at a Time

Multiple Choice

If the Fed decreases the required reserve ratio at a time when banks are holding no excess reserves,the Fed is:

A) forcing banks to increase the money supply.
B) forcing banks to decrease the money supply.
C) making it possible for banks to increase the money supply but not forcing them to do so.
D) making it possible for banks to decrease the money supply but not forcing them to do so.
E) conducting open market operations but not changing the money supply.