An Increase in Excess Reserves When the Economy Is at Less

Multiple Choice

An increase in excess reserves when the economy is at less than full employment tends to cause the interest rate to:

A) increase, which causes an increase in spending, output, and employment.
B) increase, which causes a decrease in spending, output, and employment.
C) decrease, which causes an increase in spending, output, and employment.
D) decrease, which causes a decrease in spending, output, and employment.