Mr.Brown deposits $1,000 of currency at First National Bank.Later that same day,Ms.Harris negotiates a loan for $800 at the same bank.As the result of these transactions,the money supply has

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When Mr. Brown deposits $1,000, the bank's reserves increase, but the money supply does not change. When Ms. Harris takes out an $800 loan, the bank creates new money, increasing the money supply by $800.

MrBrown Deposits $1,000 of Currency at First National Bank