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National Bank currently has $1,550 million in transaction deposits on its balance sheet. The current reserve requirement is 14 percent, but the Federal Reserve is
National Bank currently has $1,550 million in transaction deposits on its balance sheet. The current reserve requirement is 14 percent, but the Federal Reserve is decreasing this requirement to 12 percent. a. Show the balance sheet of the Federal Reserve and National Bank if National Bank converts all excess reserves to loans, but borrowers return only 50 percent of these funds to National Bank as transaction deposits. (Enter your answers in millions. Do not round intermediate calculations. Round your Panel B" answers to 3 decimal places.(e.g, 32.161)) Panel A: Initial balance sheets Federal Reserve Bank Assets Liabilities Click to select) million (Click to select) million National Banlk Liabilities (Click to select) (Click to select) (Click to select) million million million Panel B: Balance sheet after all changes Federal Reserve Bank Assets Liabilities (Click to select) million (Click to select) million National Bank Liabilities million (Click to select) million million Click to select) (Click to select) b. Show the balance sheet of the Federal Reserve and National Bank if National Bank converts 75 percent of its excess reserves to loans and borrowers return 50 percent of these funds to National Bank as transaction deposits. (Enter your answers in millions. Do not round intermediate calculations Round your "Panel B" answers to 3 decimal places. (e.g., 32.161)) Panel A: Initial balance sheets Federal Reserve Bank Assets Liabilities Click to select) million (Click to select) million National Bank Assets Liabilities (Click to select) (Click to select) Click to select million million million Panel B: Balance sheet after all changes Federal Reserve Bank Assets Liabilities (Click to select) million (Click to select) million National Bank Assets Liabilities (Click to select) (Click to select) million(Click to select million million
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