Suppose the Fed's Required Reserve Ratio Is 12

Multiple Choice

Suppose the Fed's required reserve ratio is 12%. Further suppose that the Fed buys $50 million of U.S. Treasury securities from a dealer who deposits the check, which is drawn on the Fed, with Bank A. Bank A's reserve account with the Fed has increased by $50 million and so have its (demand) deposits, its total reserves, and the overall level of M₁. How much has required reserves risen?

A) $50 million
B) $44 million
C) $10 million
D) $6 million