2. Suppose USA Bank has the following balance sheet. USA Bank (in \$millions) Federal Reserve a. Show what happens (just the immediate impact, not subsequent responses) to USA's balance sheet when the Fed purchases $100M of securities from USA Bank. USA Bank b. What is the impact on the Fed's balance sheet? That is, which categories change and by how much? c. Suppose USA Bank wants to keep its reserve/deposit ratio the same as before the open market operation. It makes a loan to Acme Tools, Inc., who deposits it in PDQ bank, which (before the deposit) had the balance sheet below: PDQ Bank What happens to PDQ's balance sheet (from the deposit, before any further response)? c. If the process stops here (PDQ takes no further action), by how much has the money supply (Currency held by the public plus Deposits) changed? By how much has the monetary base (Currency held by the public plus Reserves) changed
Other questions asked by students
a. Show the formula you use to solve the problems, and the corresponding numbers in the...
1) What are IP Cells and Stem Cells with respect to cell death and renewal? 2) What...
The SAT Verbal Test in recent years followed approximately a normal distribution with a mean...
actorio.com/secured lockdown 17,18,19 During its most recent fiscal year, Raphael Enterprises...
Tutorial: Using the RoundUp Function After completing this tutorial, you will be able to use...