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Consider the initial positions for the balance sheets of the Federal Reserve and the Banking System depicted below. In the banking system's balance sheet above,

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Consider the initial positions for the balance sheets of the Federal Reserve and the Banking System depicted below. In the banking system's balance sheet above, what should be the amounts for reserves, loans to HH/firms, and total assets? Suppose the Fed conducts an open market purchase of $200 government bonds from the banking system. Reflect the immediate impact of this open market operation in the balance sheets below. Also reflect the changes in the balance sheet of the banking system due to the money multiplier process. [Assume that the reserve requirement ratio is 10% agents do not hold any currency (c = 0), and banks do not hold any excess reserves (e = 0).] What is the monetary base and the level of the money supply after the open market operation in part (b)? What is the money multiplier

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