Statement I: If a Bank Has Negative Excess Reserves,then Its

Multiple Choice

Statement I: If a bank has negative excess reserves,then its required reserves are greater than its actual reserves.
Statement II: If a bank has negative excess reserves,it generally eliminates them by borrowing money in the Federal Funds market.

A) Statement I is true and statement II is false.
B) Statement II is true and statement I is false.
C) Both statements are true.
D) Both statements are false.