The table shows the balance sheets for the Federal Reserve Bank of New York and Wells Fargo.
Macroeconomic Principles (ECO 2013, Sect. 003), Term 2, TR 1:15
The table shows the balance sheets for the Federal Reserve Bank of New York and Wells Fargo.
The FOMC sells $20 million of securities to Wells Fargo.
Enter the transactions that take place to show the changes in the balance sheets.
Homework Answers
Asset - Securities of Federal Reserve Bank will reduce by $20 million ( so come with negative sign) while Reserves of Well Fargo increase by $20 million.
While in case of Well Fargo balance sheet,
only a change in the composition of assets with securities increasing and reserves decreases.
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The table shows the balance sheets for the Federal Reserve Bank of New York and Wells Fargo.
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loans, but borrowers return only 50 percent of these funds to
National Bank as transaction deposits.
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National Bank currently has $500 million in transaction deposits
on its balance sheet. The current reserve requirement is 10
percent, but the Federal Reserve is decreasing this requirement to
8 percent.
a. Show the balance sheet of the Federal Reserve
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loans, but borrowers return only 50 percent of these funds to
National Bank as transaction deposits.
b. Show the balance sheet of the Federal Reserve
and National Bank if...
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