$\text { TBK Bank Balance Sheet A ssets }\quad\quad\quad\quad\quad \text { Liabilities }$

Multiple Choice

$\text { TBK Bank Balance Sheet A ssets }\quad\quad\quad\quad\quad \text { Liabilities }$
$\begin{array}{|lc|lc|}\hline \text { Reserves } &&\text { Deposits }&\$2,000,000\\\text { Required }& \$ 120 \\\text { Total reserves }&\$200,000\\\text { Loans } & 1,800,000 &\\\text { Total assets } \quad\quad\quad\quad\quad\quad\quad& 2,000,000&\text { Total assets }&2,000,000 \\\hline\end{array}$
-Using the data in the above table, an open market operation in which the Fed purchased $100,000 of government securities from a bank would

A) increase the banking system?s reserves by $100,000.
B) create a reserve deficiency for the banking system.
C) lead to a rise in the federal funds rate.
D) cause demand deposits to fall by $100,000.