Practice Questions on Open Market Operation Suppose the minimum reserve requirement here is 10%. Balance Sheet of the First Bank of California Liabilities Assets $70 Deposit $700 $200 Reserves Central Bank Reserves $100 Debt Loans $730 Government Securities $200 Equity $200 Equity s 1,100 Total S 1,100 Total Stepl. Balance Sheet of the First Bank of California afer Open Market Operation Instructions: Write a new T-account for the First Bank's Balance Sheet after the Central Bank in this economy conducted an open market purchase of S100 Liabilities Assets Deposit Debt $700 $200 Equity Equity $200 Total s 1,100 Total S 1,100 Step 2. Balance Sheet of the First Bank afier it turns its excess reserves (CB Reserves) into loans Suppose that after the open market purchase transaction, the First Bank lends out all of their excess reserves. Write the new balance sheet. Assets Liabilities Deposit Debt $700 $200 Equity Equity $200 Total S 1,100 Total S 1,100