When the Required Reserve Ratio Is Lowered

Multiple Choice

When the required reserve ratio is lowered,

A) the money multiplier increases, and the amount of excess reserves increases in the banking system.
B) the money multiplier decreases, and the amount of excess reserves increases in the banking system.
C) the money multiplier decreases, and the amount of excess reserves decreases in the banking system.
D) the money multiplier increases, and the amount of excess reserves decreases in the banking system.
E) there is no change in either the money multiplier or the amount of excess reserves in the banking system.