Reference no: EM13506942

1) When a member of the nonbank public withdraws currency from her bank account,
A) both the monetary base and bank reserves fall.
B) both the monetary base and bank reserves rise.
C) the monetary base falls, but bank reserves remain unchanged.
D) bank reserves fall, but the monetary base remains unchanged.

2) When a member of the nonbank public deposits currency into her bank account,
A) both the monetary base and bank reserves fall.
B) both the monetary base and bank reserves rise.
C) the monetary base falls, but bank reserves remain unchanged.
D) bank reserves rise, but the monetary base remains unchanged.

3) When the Fed extends a $100 discount loan to the First National Bank, reserves in the banking system
A) increase by $100.
B) increase by more than $100.
C) decrease by $100.
D) decrease by more than $100.