REGARDING SHORT-ANSWER QUESTIONS AND PROBLEMS:

Your answers must be entered directly to the text box below each question/problem. The attached field should only be used if instructed.

For writing the balance sheet/T-account, please use the following format:

*Bank As Assets: Reserve $100 + $100 = $200

Loans $1000

Securities $2000

*Bank As Liabilities: Deposits $1000 + $100 = $1100

Borrowings $2000

Capital $100 Regarding calculation questions, use the following signs to complete your answers:

+ (plus sign)	Addition
- (minus sign)	Subtraction
	Negation (reversing the sign)
* (asterisk)	Multiplication
/ (forward slash)	Division
% (percent sign)	Percentage
^ (caret)	Exponential (power of)

Using the liquidity preference framework, what will happen to the interest rate in the short run and in the long run if the Fed decides to sell bonds to the public?