The central bank requires Southern to hold 10% of deposits as reserves. Southern Bank's policy prohibits it from holding excess reserves. If the central bank sells $25 million in bonds to Southern Bank which of the following will result?
a. increase in Southern's bond assets by $25 million.
b. the money supply in the economy increases
c. Southern's net worth increases by $90 million
d. increase in Southern's loan assets of $25 million
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