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National Bank currently has $450 million in transaction deposits on its balance sheet. The current reserve requirement is 12 percent but the Federal Reserve is

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National Bank currently has $450 million in transaction deposits on its balance sheet. The current reserve requirement is 12 percent but the Federal Reserve is decreasing this requirement to 10 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. 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 60 percent of these funds to National Bank as transaction deposits Required A Required B Show the balance sheet of the Federal Reserve and National Bank if National Bank converts all excess reserves to loans, but be only 50 percent of these funds to National Bank as transaction deposits. (Enter your answers in millions. Do not round Interme Round your "Panel B" answers to 3 decimal places. (e.g., 32.161)) Panel A: Initial Balance Sheets Federal Reserve Bank Assets Liabilities million million National Bank Assets 14bilities million million million Panel B: Balance Sheet after All Changes Federal Reserve Bank Assets Liabilities million million National Bank Assets Liabilities million million million Required A Required B Show the balance sheet of the Federal Reserve and National Bank if National Bank converts 75 percent of its excess reserves to borrowers return 60 percent of these funds to National Bank as transaction deposits. (Enter your answers in millions. Do not ro calculations. Round your "Panel B" answers to 3 decimal places. (e.g., 32.161)) Panel A: Initial Balance Sheets Federal Reserve Bank Assets Liabilities million million National Bank Assets Liabilities million million million Panel B: Balance Sheet after All Changes Federal Reserve Bank Assets Liabilities million million National Bank Assets Liabilities million million million

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