Suppose that there are no excess reserves in the bank system and the current amount of demand deposits are equal to $100,00. Now the monetary authorities lower the required reserve ratio from 10$ to 5%. Which of the following will likely follow?
A) The amount of excess reserves in the banking system will fall
B) The amount of excess reserves in the banking system will remain the same
C) The money creating potential of the banking system will decline
D) The money creating potential of the banking system will rise
E) The amount of required reserves in the banking system will rise