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Discount loans: a . Say that the Fed makes a $ 2 5 million discount loan to a distressed bank. What do the Taccounts of

Discount loans:

.

Say that the Fed makes a $

25

million discount loan to a distressed bank. What do the Taccounts of the Fed and the banking sector look like?

.

Why doesn

t this transaction yield a change in the size of the monetary base? Explain.

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