Refer to Scenario 1. Which of the following happens when Sheila Jones deposits the proceeds from the sale of her bond to the Fed into her checking account at the Perez Bank?
A) Perez Bank's checkable deposits increases by $100,000 and its reserves increases by $90,000.
B) Perez Bank's checkable deposits and reserves increase by $100,000 each.
C) Perez Bank's checkable deposits increases by $90,000 and its reserves increases by $100,000.
D) Perez Bank's checkable deposits and reserves increase by $90,000 each.
Ans: B) Perez Bank's checkable deposits and reserves increase by $100,000 each.
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