Lowering the Overnight Interest Rate Will

question 107

Multiple Choice

Lowering the overnight interest rate will

• A)decrease reserves, encourage banks to make fewer loans, and decrease the money supply.
• B)decrease reserves, encourage banks to make fewer loans, and increase the money supply.
• C)increase reserves, encourage banks to make more loans, and increase the money supply.
• D)increase reserves, encourage banks to make more loans, and decrease the money supply.
• E)decrease reserves; encourage banks to make more loans, and decrease the money supply.