If Banks Allow Some of Their Excess Reserves to Remain

Multiple Choice

If banks allow some of their excess reserves to remain in the vault,

A) the simple money multiplier will exceed the actual money multiplier
B) the simple money multiplier will understate the expansion of credit
C) the actual money multiplier and the simple money multiplier will be equal
D) banks will earn more interest
E) credit expansion will be greater than if they had lent out these reserves