Table 29-8 -Refer to Table 29-8. the Required Reserve Ratio Is 12

question 337

Multiple Choice

Table 29-8
-Refer to Table 29-8. The required reserve ratio is 12 percent and First National Bank sells $120 of its short-term securities to the Federal Reserve. This action will

• A)increase First National's reserves by $120. Its excess reserves are $240.
• B)decrease First National's reserves by $120. Its excess reserves are $0.
• C)increase First National's loans by $120. Its reserves decrease by $120.
• D)decrease First National's loans by $120. Its reserves increase by $120.

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