An increase in shipments of currency from the Federal Reserve to commercial banks will
A) increase the money supply.
B) increase bank reserves.
C) reduce bank reserves.
D) have no effect on bank reserves.

Question

Quizplus · Accepted Answer

An increase in shipments of currency from the Federal Reserve to commercial banks does not affect bank reserves because it is simply a conversion of reserves into currency. The total reserves remain unchanged.

An Increase in Shipments of Currency from the Federal Reserve