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can someone help me fux this? thank you! In the tables that follow you will find consolidated balance sheets for the commercial banking system and
can someone help me fux this? thank you!
In the tables that follow you will find consolidated balance sheets for the commercial banking system and the 12 Federal Reserve Banks Use columns 1 through 3 to indicate how the balance sheets would read after each of transactions a to cis completed. Do not cumulate your answers, that is analyze each transaction separately, starting in each case from the numbers provided. All accounts are in billions of dollars Instructions: Enter your answers as a whole number Answer is complete but not entirely correct. Consolidated Balance Sheet: All Commercial Banks 2 Assets: Reserves Securities Loans S 39 $34 58 S 38 S 58$ 62 S 28's 585 625 02 S 53 02 Liabilities and net worth: Checable deposits Loans from the Federal Reserve Banks $150 $ 150 1565 150 4 S 8 $ 4 Answer is complete but not entirely correct. Consolidated Balance Sheet: 12 Federal Reserve Banks 1 2 3 Assets: $60 $ 60 s 54 65 Securities Loans to commercial banks 4 $ 4 > $ 4 . $ 4 $ $34 $ 38 S 28 $ > 39 Liabilities and net worth: Reserves of commercial banks Treasury deposits Federal Reserve Notas 3 $ 3 IS 3 S 3 27 $ 27S 27 s 27 a. A decline in the discount rate prompts commercial banks to borrow an additional $4 billion from the Federal Reserve Banks. Show the new balance sheet numbers in column 1 of each table. b. The Federal Reserve Banks sell $6 billion in securities to members of the public, who pay for the bonds with checks. Show the new Return to question b. The Federal Reserve Banks sell $6 billion in securities to members of the public, who pay for the bonds with checks. Show the new balance sheet numbers in column 2 of each table. c. The Federal Reserve Banks buy $5 billion of securities from commercial banks. Show the new balance sheet numbers in column 3 of each table d. Now review each of the above three transactions, asking yourself these three questions: (1) What change. If any, took place in the money supply as a direct and immediate result of each transaction? (2) What increase or decrease in the commercial banks' reserves took place in each transaction? (3) Assuming a reserve ratio of 20 percent, what change in the money creating potential of the commercial banking system occurred as a result of each transaction? Transaction a (1) The money supply did not change (2) Reserves increased from $34 billion to $ 20 billion (3) The money-creating potential increased by $ 20 billion Transaction b: (1) The money supply decreased by $ 5 billion (2) Reserves increased from $34 billion to $ 20 billion (3) The money-creating potential increased by $ 20 billion. Transaction b: (1) The money supply decreased by $ 5 billion (2) Reserves decreased from $34 billion to $ 31 billion (3) The money-creating potential decreased by $ 2 billion. Transaction c (1) The money supply did not change (2) Reserves increased from $34 billion to $ 36 x billion (3) The money-creating potential increased by $ 25 billion Step by Step Solution
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