If the Fed Increases the Required Reserve Ratio at a Time

Multiple Choice

If the Fed increases the required reserve ratio at a time when banks are holding excess reserves,

A) it forces banks to increase the money supply
B) it forces banks to decrease the money supply
C) it makes it possible for banks to increase the money supply but does not force them to do so
D) the money supply will not increase as much as if the Fed left the reserve ratio alone
E) it is conducting open market operations but not changing the money supply