(10) 3 A simplified balance sheet for the banking system is shown below. All $ are billions. The system Ris 20%. Assets Liabilities and Equity Reserves 22 Demand Deposits 110 Securities 33 Property 50 Loans 105 Assume the Governor of the Central Bank is concerned by inflation. The Governor decides to (buy/sell) $2 billion in securities, which the chartered banks agree to (buy/sell). Record the +2 and the -2 appropriately in the table above. Calculate the excess or shortage of reserves in the system now - before any adjustments: In order to return to "no excess reserves" or "no shortage of reserves", the banks will _(make loans, stop making loans and call in loans). 4 Calculate the value of M1+ and M2+ from the following information. [10] Currency in circulation: $39 billion Currency in bank vault reserves: $17 billion Demand (personal and business) deposits at chartered banks: $60 billion Savings (personal and business) deposits at chartered banks: $112 billion Money Market Funds: $205 billion GICS held at chartered banks and credit unions and trust companies: $47 billion Deposits (personal and business) at credit unions and trust companies: $240 billion M1+ is M2+ is