When the Required Reserve Ratio Is Increased, the Excess Reserves

Multiple Choice

When the required reserve ratio is increased, the excess reserves of banks are

A) reduced, but the multiple by which the commercial banking system can lend is unaffected.
B) reduced and the multiple by which the commercial banking system can lend is increased.
C) increased and the multiple by which the commercial banking system can lend is increased.
D) reduced and the multiple by which the commercial banking system can lend is reduced.