Suppose the Required Reserve Ratio Is 10

Multiple Choice

Suppose the required reserve ratio is 10%. Mr. Normal uses his ATM card to withdraw $1,000 from this checking account in California National Bank. This action has

A) increased the M1 measure of money supply by $1,000.
B) reduced the bank's required reserves by $1,000.
C) increased the M2 measure of money supply by $1,000.
D) not changed the M1 or M2 measures of money supply.