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Federal Reserve and Banks (2/2) Problem: Assume the Fed makes a discount loan to a commercial bank. Question 1: What happens to the balance sheet

Federal Reserve and Banks (2/2) Problem: Assume the Fed makes a discount loan to a commercial bank. Question 1: What happens to the balance sheet of the commercial bank? Question 2: What happens to the balance sheet of the Fed? Question 3: What happens to the monetary base (MB)

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