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The balance sheets on the left are those of the Fed. The balance sheets on the right are the consolidated balance sheets of the commercial

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The balance sheets on the left are those of the Fed. The balance sheets on the right are the consolidated balance sheets of the commercial banks. The Fed conducts an open market operation, an overnight repurchase agreement, on Day 1. The effect of the open market operation is to increase the quantity of Treasuries in commercial bank portfolios by $100. What are the values, with + or signs, of X, Y, A, and B on Day 1 and Day 2? Day 1 Assets Liabilities Assets Liabilities $500 Treasuries $1000 Reserves $100 Treasuries $1500 Deposits +currency S A Treasuries 5X Treasuries SY Reserves 5 3 Reserves $400 Mortgage- 5100 Loans from Backed the Fed $100 Loans to $900 Reserves 5400 Equity Commercial Banks $1000 Loans to Corporations Day 2 Assets Liabilities Assets Liabilities $500 Treasuries $1000 Reserves $100 Treasuries $1500 Deposits +currency $ A Treasuries $X Treasuries $Y Reserves $ B Reserves $400 Mortgage- $100 Loans from Backed the Fed $100 Loans to $900 Reserves $400 Equity Commercial Banks $1000 Loans to Corporations Day 1 Day 1 Fed Commercial banks X = A = +$100 Y = B = Day 2 Day 2 Fed Commercial banks X = A = Y = B

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