If the Fed Lowers the Discount Rate (Relative to the Federal

Multiple Choice

If the Fed lowers the discount rate (relative to the federal funds rate) ,banks will (likely) borrow __________ from the Fed,which will __________ reserves in the banking system,and eventually __________ the money supply.

A) less; decrease; lower
B) more; increase; raise
C) the same amount; not change; lower
D) more; decrease; raise
E) none of the above