Question
Category Value Total Reserves (asset for private banks, kept at Federal Reserve) $100 Billion Currency (assets for firms, households) $50 Billion Value of Euros in
| Category | Value |
| Total Reserves (asset for private banks, kept at Federal Reserve) | $100 Billion |
| Currency (assets for firms, households) | $50 Billion |
| Value of Euros in the U.S. (assets for private banks, firms, households, etc.) | $1 Billion |
| U.S. Gov't bonds (assets for private banks, firms, households, etc.) | $30 Billion |
| Demand deposits (liability for private banks) | $1 Trillion |
| Corporate and consumer loans (asset for private banks) | $400 Billion |
| Mortgage loans (asset for private banks) | $485 Billion |
| Certificates of Deposit, CDs (liability for private banks) | $10 Billion |
| Reserve requirement on demand deposits | .10 |
If Federal Reserve buys $20 Billion in bonds from private banks:
- What will happen to the Federal Funds Rate, the prime rate, and other nominal interest rates in the economy? (Go up, down, stay the same?) Why?
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Income Tax Fundamentals 2013
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
31st Edition
1111972516, 978-1285586618, 1285586611, 978-1285613109, 978-1111972516
