1. Suppose the Federal Reserve conducts Repurchase Agreements worth of $40 million. At the same time, it provides discount loans to the banking system as a whole worth of $10 million.

The required reserve ratio is 5%, the excess reserve-to-deposit ratio is 25%, and the currency-to-deposit ratio is 40%.

1. How will it change the Feds balance sheet due to these Repo transactions and newly issued currency? Show appropriate changes in the following balance sheet.

A. Suppose the Federal Reserve conducts Repurchase Agreements worth of $40 million. At the same time, it provides discount loans to the banking system as a whole worth of $10 million. The required reserve ratio is 5%, the excess reserve-to-deposit ratio is 25%, and the currency-to- deposit ratio is 40%. 1. How will it change the Fed's balance sheet due to these Repo transactions and newly issued currency? Show appropriate changes in the following balance sheet. millions millions Assets Loans to depository institutions Securities, Repos Gold Special Drawing rights Foreign currency Liabilities Federal Reserve notes Bank Reserves Treasury deposits Reverse Repo Equity 2. A) How (increase/decrease) and by how much will the monetary base change? B)Calculate the simple deposit multiplier assuming people do not hold any cash and banks do not hold any excess reserves. c) Calculate how (increase/decrease) and how much will the money supply change using the simple deposit multiplier. A. Suppose the Federal Reserve conducts Repurchase Agreements worth of $40 million. At the same time, it provides discount loans to the banking system as a whole worth of $10 million. The required reserve ratio is 5%, the excess reserve-to-deposit ratio is 25%, and the currency-to- deposit ratio is 40%. 1. How will it change the Fed's balance sheet due to these Repo transactions and newly issued currency? Show appropriate changes in the following balance sheet. millions millions Assets Loans to depository institutions Securities, Repos Gold Special Drawing rights Foreign currency Liabilities Federal Reserve notes Bank Reserves Treasury deposits Reverse Repo Equity 2. A) How (increase/decrease) and by how much will the monetary base change? B)Calculate the simple deposit multiplier assuming people do not hold any cash and banks do not hold any excess reserves. c) Calculate how (increase/decrease) and how much will the money supply change using the simple deposit multiplier