Economic-Checking account problem?

Question

If a person withdraws $1,000 out of her checking account, the bank ??

loses reserves and checkable deposits equal to the withdrawal.

loses only checkable deposit liabilities equal to the withdrawal.

gains the ability to increase its loans.

finds that both its assets and its liabilities decline.

a and d

Answer 1

A and D.

The bank pays out $1,000 in cash, which is an asset that counts towards reserves.  Checkable deposits are a liability (from the bank's perspective), and these go down by $1,000 as well.  So the bank loses both reserves (assets) and checkable deposits (liabilities).