When the Fed Purchases Government Securities ________ Loans End Up

Multiple Choice

When the Fed purchases government securities ________ loans end up being made because ________.

A) more;excess reserves in the banking system increase
B) more;excess reserves in the banking system decrease
C) fewer;excess reserves in the banking system increase
D) fewer;excess reserves in the banking system decrease
E) fewer;required reserves in the banking system increase but desired reserves decrease