Refer to Exhibit 13-1

Multiple Choice

Refer to Exhibit 13-1.Suppose that the Federal Reserve conducts open market operations by purchasing $1,000 worth of government securities from Bank A.At the end of this process of money creation,what equation would be used to determine the total amount of new checkable deposits?

A) simple deposit multiplier x change in reserves resulting from the initial injection of funds
B) 1/r x change in reserves resulting from the initial injection of funds
C) r x change in reserves resulting from the initial injection of funds
D) 1/r
E) a or b