Assume That Banks Are Holding Excess Reserves Because Firms and Consumers

Assume that banks are holding excess reserves because firms and consumers are not willing to borrow money. A decrease in the bank rate is likely to

A) decrease the money supply because it is now cheaper for discount houses to borrow from the Bank of England instead of buying government securities.
B) decrease the money supply because it will now be more expensive for firms and consumers to borrow money.
C) not change the money supply because banks already have excess reserves they cannot lend.
D) increase the money supply because it is now cheaper for discount houses to borrow from the Bank of England.