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Show the changes in T accounts of the Fed, Treasury, Banks and the Public resulting from the following transactions, and explain the impact on the
Show the changes in T accounts of the Fed, Treasury, Banks and the Public resulting from the following transactions, and explain the impact on the monetary base and money supply (required reserve ratio is 10%).
- Treasury finances the budget deficit of $100mnby selling a bond to the public.
- Treasury finances the budget deficit of $100mnby selling a bond to the Fed.
- A bank obtains a discount loan of $100mnfrom the Fed.
- A bank borrows from the Federal Funds Market (from another bank) a loan of $100mn.
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