When the Federal Reserve (Fed) increases the reserve requirement, banks are required to hold a larger percentage of their deposits as reserves and cannot lend out as much. This tightening of available funds for lending means that there is less money circulating in the economy. Therefore, the correct answer is:
a) less decrease
In this case, ‘less decrease’ indicates that while the money supply may still decrease due to the higher reserve requirements, the extent of that decrease is less pronounced compared to a situation where no changes were made. In essence, by limiting the amount banks can lend, the money supply contracts.