Scenario: The following table shows the initial balance sheets of Bank A and the Fed. Suppose that the Fed then buys $10 million in bonds from Bank A.

-Refer to the scenario above.After this transaction,Bank A's deposits ________ and reserves ________.
A) increase by $10 million; increase by $10 million
B) increase by $10 million; decrease by $10 million
C) remain unchanged; decrease by $10 million
D) remain unchanged; increase by $10 million

Question

Scenario: The following table shows the initial balance sheets of Bank A and the Fed. Suppose that the Fed then buys $10 million in bonds from Bank A.
 
-Refer to the scenario above.After this transaction,Bank A's deposits ________ and reserves ________.
A) increase by $10 million; increase by $10 million 
B) increase by $10 million; decrease by $10 million 
C) remain unchanged; decrease by $10 million 
D) remain unchanged; increase by $10 million

Quizplus · Accepted Answer

The Answer of Scenario: The following table shows the initial balance sheets of Bank A and the Fed. Suppose that the Fed then buys $10 million in bonds from Bank A.
 
-Refer to the scenario above.After this transaction,Bank A's deposits ________ and reserves ________.
A) increase by $10 million; increase by $10 million 
B) increase by $10 million; decrease by $10 million 
C) remain unchanged; decrease by $10 million 
D) remain unchanged; increase by $10 million

Scenario: the Following Table Shows the Initial Balance Sheets of Bank