Assume That Smith Deposits $600 in Currency into Her Checking

Multiple Choice

Assume that Smith deposits $600 in currency into her checking account in the XYZ Bank. Later that same day, Jones negotiates a loan for $1,200 at the same bank. In what direction and by what amount has the supply of
Money changed?

A) decreased by $600
B) increased by $1,800
C) increased by $600
D) increased by $1,200