Suppose Banks Decide to Hold More Excess Reserves Relative to Deposits.Other

Multiple Choice

Suppose banks decide to hold more excess reserves relative to deposits.Other things the same,this action will cause the

A) money supply to fall.To reduce the impact of this the Fed could lower the discount rate.
B) money supply to fall.To reduce the impact of this the Fed could raise the discount rate.
C) money supply to rise.To reduce the impact of this the Fed could lower the discount rate.
D) money supply to rise.To reduce the impact of this the Fed could raise the discount rate.