If a bank sells $10 million of bonds to the fed to pay back $10 million on the loan it owes, what will be the effect on the level of checkable deposits? assume that the required reserve ratio on checkable deposits is 10%, banks do not hold any excess reserves, and the public's holdings of currency do not change.

There will be no effect on the level of checkable deposits.

Explanation:

Since the bank sold the $10 million of bonds to pay back a debt, that means that the bank's checkable deposits will not change. The bank's reserves will remain unchanged since the checkable deposits remain unchanged.

d, conspicuous consumption is when you try to increase your wealth or social status (and in the case he's trying to create the perception of wealth considering he can't really afford it)