Final answer:
Depositing $1 million into a checking account increases the banking system's total reserves but does not change the monetary base as the currency is simply transferred into bank reserves.
Step-by-step explanation:
When Bash, the investor, deposits $1 million of currency into his checking account, the total reserves in the banking system will increase, and the monetary base will remain unchanged. By moving currency from circulation into the banking system, the deposit becomes part of the bank's reserves, which is why total reserves will increase. However, the monetary base, which includes currency in circulation and the reserves of the banks, will not change because the currency has simply shifted from being in circulation to being in bank reserves.
This means the correct answer to the question would be option (c): the total reserves in the banking system will increase, and the monetary base will remain unchanged. Keep in mind that the M1 money supply, which includes checkable (demand) deposits, does not change as a result of this deposit because it's a direct transfer of currency into a checking account.