“The second sort of early quantitative easing operations began on the liabilities side of the Fed’s...
- “The second sort of early quantitative easing operations began on the liabilities side of the Fed’s balance sheet. To assist the Fed, the Treasury started borrowing in advance of its needs (which were not yet as ample as they would become later) and depositing the excess funds in its accounts at the central bank. This enabled the Fed to increase its assets—by purchasing more securities and making more discount window loans without increasing bank reserves”
Show the impact of the second type of QE on the balance sheet of the Fed
Homework Answers
The impact is shown above. The fed borrowed and deposited the excess funds as deposits. This increases on the liabilities side. Then the Fed purchased securities and provided loans, both of these show up on the assets side.
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“The second sort of early quantitative easing operations began
on the liabilities side of the Fed’s...
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