Assume the Legal Reserve Ratio Is 25 Percent and the Fourth

Assume the legal reserve ratio is 25 percent and the Fourth National Bank borrows $10,000 from the Federal Reserve Bank in its district. As a result,

A) commercial bank reserves are increased by $10,000.
B) the supply of money automatically declines by $7,500.
C) commercial bank reserves are increased by $7,500.
D) the supply of money is automatically increased by $10,000.