Question: In a banking system with limited reserves, a decrease in the supply of money (A) lowers interest rates, decreases borrowing, and thereby decreases aggregate demand.

In a banking system with limited reserves, a decrease in the supply of money

(A) lowers interest rates, decreases borrowing, and thereby decreases aggregate demand.

(B) raises interest rates, increases borrowing, and thereby increases aggregate demand.

(C) raises interest rates, decreases borrowing, and thereby decreases aggregate demand.

(D) lowers interest rates, increases borrowing, and thereby increases aggregate demand.

(E) lowers interest rates, increases borrowing, and thereby decreases aggregate demand.

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