If your employer makes a direct deposit of $850 into your checking account on pay day, what happens to the bank's balance sheet as a result of this transaction? Assume a 10 percent reserve requirement and assume that your employer's bank is not the same as yours.

The bank's balance sheet is unchanged.

The bank's net worth increases by $850.

The bank acquires an $850 asset in the form of deposits at the Fed but loses $850 in vault cash.

The bank acquires an $850 liability in the form of a checking account deposit plus an $850 asset in the form of vault cash, and ends up with $850 in excess reserves.

The bank acquires an $850 liability in the form of a checking account deposit plus an $850 asset in the form of deposits at the Fed, and ends up with $765 in excess reserves.