When an Individual Deposits Currency into a Checking Account

Multiple Choice

When an individual deposits currency into a checking account:

A) bank reserves increase, which allows banks to lend more and increases the money supply.
B) bank reserves decrease, which reduces the amount banks can lend and reduces the growth of the money supply.
C) bank reserves are unchanged.
D) bank liabilities increase, which reduces the amount banks can lend and reduces the growth of the money supply.