The required reserve ratio is 0.2 and the Federal Reserve sells $1 million in securities. If there are no leakages and banks do not hold excess reserves, then which of the following is the change in the money supply? An increase of $1 million Answer A: An increase of $1 million A An increase of $1.2 million Answer B: An increase of $1.2 million B An increase of $5 million Answer C: An increase of $5 million C A decrease of $1.2 million Answer D: A decrease of $1.2 million D A decrease of $5 million
