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BSW Bank currently has $300 million in transaction deposits on its balance sheet. The Federal Reserve has currently set the reserve requirement at 6 percent

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BSW Bank currently has $300 million in transaction deposits on its balance sheet. The Federal Reserve has currently set the reserve requirement at 6 percent of transaction deposits. a. If the Federal Reserve decreases the reserve requirement to 4 percent, show the balance sheet of BSW and the Federal Reserve System just before and after the full effect of the reserve requirement change. Assume BSW withdraws all excess reserves and gives out loans and that borrowers eventually return all of these funds to BSW in the form of transaction deposits. b. Redo part (a) using a 8 percent reserve requirement. Complete this question by entering your answers in the tabs below. Required A Required B If the Federal Reserve decreases the reserve requirement to 4 percent, show the balance sheet of BSW and the Federal Reserve System just before and after the full effect of the reserve requirement change. Assume BSW withdraws all excess reserves and gives out loans and that borrowers eventually return all of these funds to BSW in the form of transaction deposits. (Do not round Intermediate calculations. Enter your answers in millions rounded to the nearest dollar amount.) Show less Panel A: Initial Balance Sheets Federal Reserve Bank Assets Liabilities 1 million BSW Bank Liabilities Panel B: Balance Sheet after All Changes Federal Reserve Bank Liabilities Required A Required B If the Federal Reserve decreases the reserve requirement to 4 percent, show the balance sheet of BSW and the Federal Reserve System just before and after the full effect of the reserve requirement change. Assume BSW withdraws all excess reserves and gives out loans and that borrowers eventually return all of these funds to BSW in the form of transaction deposits. (Do not round Intermediate calculations. Enter your answers in millions rounded to the nearest dollar amount.) Show less Panel A: Initial Balance Sheets Federal Reserve Bank Asset Liabilities milion BSW Bank million million Panel B: Balance Sheet after All Changes Federal Reserve Bank Assets million on BSW Bank Assets Liabilities million million Required >

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