If Uncertainty Causes Commercial Banks to Increase Their Holdings of Excess

Multiple Choice

If uncertainty causes commercial banks to increase their holdings of excess reserves, other things constant, this will

A) reduce the money supply during a period of inflation and increase it during a recession.
B) reduce the size of the deposit expansion multiplier.
C) increase the size of deposit expansion multiplier.
D) reduce the size of the deposit expansion multiplier during a period of inflation and increase it during a recession.