Suppose that JPMorgan Chase sells $$100$ million in Treasury bills to the Fed.

a$.$ Use T$-$accounts to show the immediate impact of this sale on the balance sheets of JPMorgan Chase and the Fed. $($Enter your responses as integers. Include a minus sign to indicate a

negative change, but do not include a plus sign for a positive change.$)$

b$.$ Suppose that before selling the Treasury bills, JPMorgan Chase had no excess reserves. Suppose that the required reserve ratio is $20\%.$ Suppose that JPMorgan Chase makes the maximum loan it

can from the funds acquired by selling the Treasury bills. Assume that the loan was made to a JP Morgan Chase customer and deposited into his or her account. Use a T$-$account to show the initial impact

of granting the loan on JPMorgan Chase's balance sheet. $($Enter your responses as integers. Include a minus sign to indicate a negative change, but do not include a plus sign for a positive change.$)$

c$.$ Now suppose that whoever took out the loan in part $($b$)$ writes a check for this amount and that the person receiving the check deposits it in Wells Fargo Bank. Show the effect of these transactions on

the balance sheets of JPMorgan Chase and Wells Fargo after the check has been cleared. $($Enter your responses as integers. Include a minus sign to indicate a negative change, but do not include a plus

sign for a positive change.$)$

JP Morgan Chase Bank

Wells Fargo