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Please answer all parts to number 3 and 4 and use the given balance sheets for 3a and 3b

suppose the simplified consolidated balance sheet shown below is for the entire commercial banking astem and that all figures are billions of dollars. Assume that the uired reserve ratio is 2020. Liabilities and Net Worth Checkable Deposits $1510 Assets $310 Reserves $600 Gov't. Securities $600 NOTE: Use the balance sheets on p. 4 for questions 3a. and 3b. Federal Reserve sells a. Starting with the balance sheet shown above, illustrate what will happen if the bonds with checks. suo billion in securities to members of the public, who pay for the look immediately Draw a new balance sheet showing how the consolidated balance sheet would after this transaction. happen if the Federal Reserve buys b. Starting with the balance sheet shown above, illustrate what will showing S20 billion in government securities from commercial banks. Draw a new balance sheet how the consolidated balance sheet would look immediately after this transaction. For each of the transactions above (in parts a. and b.) answer the following questions: of each 1) What change, if any, took place in the money supply as a direct and immediate result 2) What increase or decrease reserves took place in each transaction? transaction? 3) change in the money in the commercial banks' occurred creating potential ofthe commercial banking system because of each transaction? (Hint: What is the monetary multiplier in this example?) 4. a. If the required reserve ratio is 10%, what is the value of the monetary multiplier? If the required reserve ratio is reduced from 10% to 5%, what happens to the value of the monetary multiplier? Explain in words why this makes sense (with respect to the banking system, not the formula for the multiplier) b. If the monetary multiplier is 6, what is the required reserve ratio? Given this information, how could the Federal Reserve increase the money supply by $120 million

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