When you deposit $50 in your account at First National Bank and a $100 check you have written on this account is cashed at Chemical Bank,then

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Quizplus · Accepted Answer

When you deposit $50 in your account at First National Bank, the bank's reserves increase by $50. However, when the $100 check is cashed at Chemical Bank, the bank will send a request to First National Bank to transfer the funds. To pay the check, First National Bank will reduce your account balance by $100, which will reduce the bank's reserves by the same amount. Therefore, the reserves at First National Bank fall by $50.

When You Deposit $50 in Your Account at First National