Assume a simplified banking system subject to a 20 percent required reserve ratio. If there is an initial increase in excess reserves of $100,000, the money supply a. increases $100,000. b. increases...

Assume a simplified banking system subject to a 20

percent required reserve ratio. If there is an initial

increase in excess reserves of $100,000, the money

supply

a. increases $100,000.

b. increases $500,000.

c. increases $600,000.

d. decreases $500,000.