If the Desired Reserve Ratio Were Increased,what Impact Would This

Multiple Choice

If the desired reserve ratio were increased,what impact would this have on the money supply and outstanding bank loans?

A) Both the money supply and the outstanding loans of banks would tend to decrease.
B) Both the money supply and the outstanding loans of banks would tend to increase.
C) The money supply would tend to increase, but the outstanding loans of banks would tend to decrease.
D) The money supply would tend to decrease, but the outstanding loans of banks would tend to increase.