Assume the Desired Reserve Ratio Is 25 Percent and the Winnipeg

Multiple Choice

Assume the desired reserve ratio is 25 percent and the Winnipeg Bank borrows $10,000 from the Bank of Canada.As a result:

A) chartered bank reserves are increased by $10,000.
B) the supply of money automatically declines by $7,500.
C) chartered bank reserves are increased by $7,500.
D) the supply of money is automatically increased by $10,000.