Tom decides to withdraw $300 out of his checking account. The impact of this transaction on the Fed's balance sheet will be:
A. No change in total assets or total liabilities, but an increase in the liability of currency and decrease in the liability of reserves by $300 respectively.
B. No change in total assets but the liability of currency increase by $300.
C. Total assets decrease by $300 and the liability of currency increase by $300.
D. None of the above.
Answer:A
Tom decides to withdraw $300 out of his checking account. The impact of this transaction on the Fed's balance sheet will be:
A. No change in total assets or total liabilities, but an increase in the liability of currency and decrease in the liability of reserves by $300 respectively. B. No change in total assets but the liability of currency increase by $300. C. Total assets decrease by $300 and the liability of currency increase by $300. D. None of the above.