Money&banking:

a. Use T-accounts to examine what happens when the FED conducts an open market purchase in which $100 of bonds are bought from the public. Show the effects of this policy in the balance sheet of FED, banking system, and non- bank public.

b. Illustrate all effects that causes a discount loan of $100 made by FED to the First National Bank.

c. Use T-accounts to show the effect of the Federal Reserve being paid back a $100 discount loan from a bank.