Assume the Required Reserve Ratio is 20% for all banks.

If Rob, a Third National Bank customer, writes a check for $100,000 to Darrin, a First National Bank Customer, who deposits the check in full into his checking account, then what impact has the transaction had on the loan creating potential of the banking system (these three banks)?

A. Had no impact at all.

B. Increased by $80,000.

C. Decreased by $100,000.

D. Increased by $100,000.

E. Decreased by $80,000.

First National Bank Assets Liabilities and Net Worth US Treasury Bonds $45 0,000 Net Worth $500,000 Reserves (Cash) $175,000 Checkable Deposits $250,000 Loans $ 125 ,000 Second National Bank Assets Liabilities and Net Worth Property (Capital) $100,000 Net Worth $250,000 Reserves (Cash) $250,000 Checkable Deposits $100,000 Third National Bank Assets Liabilities and Net Worth US Treasury Bonds $900,000 Net Worth $1,000,000 Reserves (Cash) $350,000 Checkable Deposits $500,000 Loans $250,000