Sally's grandmother has kept $100,000 in a cookie jar for years and gives it so Sally, who immediately puts it into her bank in a savings account. The bank has a 20% reserve rate. Which of the following is true?
Excess reserves increase by $20,000
II. The money supply increases by as much as $120,000
III. There is no change in the bank's money supply
a. I only
b. Il only
c. I and II
d. None of the abovel