wwwwww

QUESTION 21 B1 North Bank issues $50,000 capital notes to West Bank (transaction A} and issues $20,000 shares to Mr Williams (transaction B), a rich retiree who had received income on its past investments, income that he held in his transactional bank account in West Bank and used to buy the shares. North Bank makes a $870,000 loan to its depositor Bob the Builder, a construction rm that needs to renew its stock of trucks. (transaction C) a) Draw the changes in North bank's balance sheet and in West Bank's balance sheet resulting from transactions A, B and C. [Clearly indicate the name of the item affected in the balance, the change in the value and between brackets the letter of the transaction] No explanation is required. (5 marks) b) Represent the diagram of flow of funds for all the transactions above. [Clearly indicate the nancial instruments, the nancial markets, the type of money involved, the creation and destruction where relevant] Do NOT refer to SSU, DSU or financial intermediary. Do NOT include the central bank. No explanation is required. (4 marks) c) Identify which part of the story is a case of channelling of funds in the nancial system. Explain your answer in details. (3 marks) cl) Identify which part of the story is a case of funding of the economy by net creation of private money. Explain your answer in details. (3 marks) Hand write neatly the answers on a blank piece of paper with your Jfull name and student number at the top of the page. Take a picture or several pictures if needed and convert it or them into a pdffile. Upload the pdfle into this question. Only one pdf file can be uploaded per question so merge your pictures ifneeded. Carefully keep your hand-written answers and your original pictures for future reference. Attach File Browse My Computer