Increasing Excess Reserves

Multiple Choice

Increasing excess reserves:

A) lowers the interest rate, which in turn increases loan making, the money supply, and the level of economic activity.
B) lowers the interest rate, which in turn decreases loan making, the money supply, and the level of economic activity.
C) increases the interest rate, which in turn increases loan making, the money supply, and the level of economic activity.
D) increases the interest rate, which in turn decreases loan making, the money supply, and the level of economic activity.