Question 8 Assets Securities (A) Loans to Banks (C) The Fed Liabilities and Net Worth Currency in Circulation (B) Reserves (D) Assets Banks Liabilities and Net Worth Reserves (E) Securities (G) Deposits (F) Borrowings (H) Loans (I) Bank Capital (J) Non-Bank Public Assets Liabilities and Net Worth Currency in Circulation (K) Loans (L) Deposits (M) Net Worth (O) 1 pts Securities (N) The above figure shows the three balance sheets by the players in the money supply process. These are aggregate balance sheets. For example, the deposits in the non-bank-public balance sheet is the sum of all the deposits owned by individuals and businesses. An event occurs. You need to figure out which one of the above entries will change as a result of this event, all else the same. Consider only the immediate effects. Don't assume any subsequent decisions by the players. Place a 1 in the box if the entry will change, 0 otherwise. No commas or decimals, just 0 and 1. Event: The Fed buys $100 million worth of bonds from banks (Open market purchase). The Fed A = 1 ' B = 0 , C = 0 Banks D = 1 E = 1 F = 1 G= 1 H= 0 | = 0 J= 0 Non-Bank Public K = 0 0 L= 0 , N = 0 M= O = 0