If the Fed Were to Increase the Discount Rate So

Multiple Choice

If the Fed were to increase the discount rate so that it was much higher than the federal funds rate,eventually

A) reserves would decrease and the money supply would decrease.
B) reserves would increase and the money supply would increase.
C) reserves would decrease and the money supply would increase.
D) reserves would increase and the money supply would decrease.
E) there is no impact on reserves or the money supply.