T-accounts for the FED and for all commercial banks are given below.

The FED | All commercial Banks

Assets | Liabilities + Equity| Assets |Liabilities+ Equity

Securities 200 | Currency 100 | Reserves 20 | Deposits 150

Loans to banks 100| Reserves 20 | Loans 175 |Loans from fed 100

| Equity ?? | Securities 125 | Equity ??

a. Determine the values of equity at the FED and all commercial banks.

b. If the required reserve ratio is rr = 0.10, what are excess reserves?

c. In the T-accounts below, show the immediate effects (ignore the long-term multiplier effects) of an open market sale of bonds by the FED to commercial banks in the amount of 10.

The FED | All commercial Banks

Assets | Liabilities + Equity| Assets |Liabilities+ Equity

Securities | Currency | Reserves | Deposits

Loans to banks |Reserves | Loans |]Loans from FED

| Equity | Securities | Equity

d. Briefly explain whether or not commercial banks are meeting their reserve requirement.

e. In the T-accounts below, show the long-term multiplier effects of the open market sale of bonds described in part c.

The FED

Assets | Liabilities + Equity| Assets |Liabilities+ Equity

Securities | Currency | Reserves | Deposits

Loans to banks 1 | Reserves | Loans |Loans from fed

| Equity | Securities | Equity