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

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.