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Consider the Cumulated Balance Sheets for the Federal Reserve System and the Commercial Banking System. All figures are in billions of US dollars. Show how
Consider the Cumulated Balance Sheets for the Federal Reserve System and the Commercial Banking System. All figures are in billions of US dollars. Show how each transaction causes the money supply (Ml) to change. Do not cumulate your answers. Use a table like the one used for the in-class problem similar to this one. Commercial Banks pay $11 billion in loans from the FED. The FED buys $9 billion in securities from the Public; the FED will send government checks to pay the Public. Customers of Commercial Banks borrow an additional $5 billion in personal and commercial loans. The FED sells $8 billion in securities to Commercial Banks. Commercial banks send $7 billion worth of currency to the FED. Consider the Cumulated Balance Sheets for the Federal Reserve System and the Commercial Banking System. All figures are in billions of US dollars. Show how each transaction causes the money supply (Ml) to change. Do not cumulate your answers. Use a table like the one used for the in-class problem similar to this one. Commercial Banks pay $11 billion in loans from the FED. The FED buys $9 billion in securities from the Public; the FED will send government checks to pay the Public. Customers of Commercial Banks borrow an additional $5 billion in personal and commercial loans. The FED sells $8 billion in securities to Commercial Banks. Commercial banks send $7 billion worth of currency to the FED
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