Which of the Following Is FALSE

Multiple Choice

Which of the following is FALSE?

A) When the Fed injects more reserves into the banking system, the money supply will increase.
B) If the Fed follows a monetary rule, the money supply will never increase.
C) One tool the Fed can use to change the money supply is to alter the reserve requirement.
D) If the Fed wants to maintain interest rates at a given level, it will have to allow the rate of money supply growth to vary.