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National Bank currently has $500 million in transaction deposits on its balance sheet. The current reserve requirement is 10 percent, but the Federal Reserve is

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National Bank currently has $500 million in transaction deposits on its balance sheet. The current reserve requirement is 10 percent, but the Federal Reserve is decreasing this requirement to 8 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 Complete this question by entering your answers in the tabs below. 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 borrowers ret only 50 percent of these funds to National Bank as transaction deposits. (Enter your answers in millions. Do not round intermediate calcul Round your "Panel B' answers to 3 decimal places. (e.... 32.161)) Panel A: Initial Balance Sheets Federal Reserve Bank Assets Liabilities Securities 50 million Reserve accounts $ 50 million National Bank Assets Liabilities $ $ Loans Reserve deposits at Fed Transaction deposits 500 million 450 million 50 million Panol B: Balance Sheet ofter All Changes Federal Reserve Bank Assets Liabilities Securities million Reserve accounts million National Bank Assets Liabilities Transaction deposits million Loans Reserve deposits at Fed million million Required Required 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. (Enter your answers in millions. Do not round interm calculations. Round your "Panel B" answers to 3 decimal places. (e.g., 32,161)) Panel A: Initial Balance Sheets Federal Reserve Bank Assets Liabilities Securities million Reserve accounts million National Bank Assets Liabilities Reserve deposits at Fed Loans Transaction deposits million million million Panel B: Balance Sheet after All Changes Federal Reserve Bank Assets Liabilities Securities million Reserve accounts million National Bank Assets Liabilities Reserve deposits at Fed Loans Transaction deposits million million million

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