If the Reserve Ratio Is 5 Percent,banks Do Not Hold

Multiple Choice

If the reserve ratio is 5 percent,banks do not hold excess reserves,and people do not hold currency,then when the Fed purchases $20 million worth of government bonds,bank reserves

A) increase by $20 million and the money supply eventually increases by $400 million.
B) decrease by $20 million and the money supply eventually decreases by $400 million.
C) increase by $20 million and the money supply eventually increases by $100 million.
D) decrease by $20 million and the money supply eventually decreases by $100 million.