The writing of a $1,000 check that is drawn on Bank A and deposited in Bank B

A) increases the money supply initially by $1,000.
B) reduces total reserves of Bank A by $1,000 and increases the total reserves of Bank B by the same amount.
C) reduces the required reserves of Bank A by $1,000 and increases the required reserves of Bank B by the same amount.
D) reduces the excess reserves of Bank A by $1,000 and increases the excess reserves of Bank B by the same amount.

When a $1,000 check is written on Bank A and deposited in Bank B, Bank A's reserves decrease by $1,000 since the check is drawn on their account. However, Bank B's reserves increase by $1,000 since the check is deposited into their account. The money supply remains unchanged since the $1,000 is simply being transferred from one bank to another. Therefore, choice A is incorrect. Also, required reserves are calculated based on deposits, not checks that are written and deposited, so choices C and D are incorrect. Only choice B correctly describes the impact on the reserves of the two banks.