If the Required Reserve Ratio Were Decreased

Multiple Choice

If the required reserve ratio were decreased,

A) the money supply would tend to decrease, but the outstanding loans of banks would tend to increase.
B) both the money supply and the outstanding loans of banks would tend to decrease.
C) the money supply would tend to increase, but the outstanding loans of banks would tend to decrease.
D) both the money supply and the outstanding loans of banks would tend to increase.