In the classical model, beginning from an equilibrium in which the government is running a budget surplus, an increase in government spending will

The ________ the desired reserve ratio, the ________ the ________ in the quantity of money created from an initial increase of $100,000 in the monetary base

A) smaller; larger; decrease B) larger; larger; decrease C) larger; smaller; decrease D) smaller; larger; increase E) larger; larger; increase

If the Fed wanted to institute a more expansionary monetary policy, which of the following would it be most likely to do?

a. reduce taxes b. increase government expenditures c. buy government bonds from the public d. raise the discount rate