9. Problems and Applications Q9 Suppose that the reserve requirement for checking deposits is 12.5 percent and that banks do not hold any excess reserves. If the Fed sells $2 million of government bonds, the economy's reserves bymillion, and the money supply will bymillion. Now suppose the Fed lowers the reserve requirement to 10 percent, but banks choose to hold another 2.5 percent of deposits as excess reserves. True or False: The money multiplier will decrease. True False True or False: As a result, the overall change in the money supply will increase. True False