Which of the Following Is False

Multiple Choice

Which of the following is false?

A) ​The Fed controls the supply of money, even though privately owned commercial banks actually create and destroy money by making loans.
B) ​With a 10% required reserve ratio, a $10,000 cash deposit in a bank would result in an increase in the bank's excess reserves by $1000.
C) ​With a 10% required reserve ratio, a $1,000 bond purchase by the Fed directly creates $1,000 in money in the form of bank deposits, and indirectly permits up to $9,000 in additional money to be created through the multiple expansion in bank deposits.
D) ​When the Fed sells government bonds, it will tend to cause a multiple contraction of bank deposits.