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If a Bank Increases the Amount of Cash It Has

Question 41

Multiple Choice

If a bank increases the amount of cash it has in its vault,how would this affect the bank's balance sheet?


A) Reserves would increase, liabilities would stay the same, and owner's equity would increase.
B) Reserves would decrease, liabilities would stay the same, and owner's equity would increase.
C) Reserves would increase, liabilities would decrease, and owner's equity would decrease.
D) Reserves would increase, liabilities would stay the same, and owner's equity would decrease.
E) Reserves would decrease, liabilities would increase, and owner's equity would decrease.

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