Which of the following is a result of a banking transaction creating new excess reserves for a bank?
A) An increase in the amount of loans made by the bank and an increase in the supply of money
B) An increase in the amount of loans made by the bank and a decrease in the supply of money
C) A decrease in the amount of loans made by the bank and an increase in the supply of money
D) A decrease in the amount of loans made by the bank and a decrease in the supply of money
E) An indeterminate effect on the money supply
Correct Answer:
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