If a Bank's Deposits at the Fed Increase by $10

question 329

Multiple Choice

If a bank's deposits at the Fed increase by $10 million, then

• A) both the bank's assets and the Fed's assets increase by $10 million.
• B) both the bank's liabilities and the Fed's liabilities increase by $10 million.
• C) the bank's assets increase by $10 million and the Fed's liabilities increase by $10 million.
• D) the bank's assets increase by $10 million, but there is no change at the Fed since it does not really have assets or liabilities.