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Assume the following balance sheet for the Federal Reserve and commercial banks (in billions $). If the required reserve ratio is 10% and the commercial
Assume the following balance sheet for the Federal Reserve and commercial banks (in billions $). If the required reserve ratio is 10% and the commercial banks borrow an additional $100 billion from the Fed (using the Discount Window). Show the effect on the balance sheet of the commercial banks and the Federal Reserve. Explain the impact on the money supply
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