Please help?


A small local bank has made many loans to several energy companies recently because these companies have had no problem repaying their loans in the past. If energy prices suddenly drop and the companies cannot pay their loans, what is the most likely effect on the local money supply? (3 points)

Select one:

AThe bank would not be greatly affected, and the money supply would not change.

BThe bank would have a minor increase in business, and the money supply would increase.

CThe bank would immediately make more loans, and the money supply would increase.

DThe bank would be negatively affected, and the money supply would decrease.