Question

If the Federal Reserve decreases the reserve rate from 5% to 2.5%, how does this affect the amount of money that would result because of fractional-reserve banking from an initial deposit into a bank of $35,000?

A. It decreases the amount by $700,000.
B. It increases the amount by $700,000.
C. It increases the amount by $1,400,000.
D. It decreases the amount by $1,400,000.