If the Fed injects reserves into the banking system and they are held as excess reserves, then the monetary base ________ and the money supply ________.

If the Fed injects reserves into the banking system and they are held as excess reserves, then the monetary base ________ and the money supply ________.

If the Fed injects reserves into the banking system and they are held as excess reserves, then the monetary base ________ and the money supply ________.




A) remains unchanged; remains unchanged
B) remains unchanged; increases
C) increases; increases
D) increases; remains unchanged



Answer: D