A = Banks E= Non-Bank Public K= B = , F = Assets ,J= Securities (A) Loans to Banks (C) The above figure shows the three balance sheets by the players in the money supply process. These are aggregate balance sheets. For example, the deposits in the non-bank-public balance sheet is the sum of all the deposits owned by individuals and businesses. An event occurs. You need to figure out which one of the above entries will change as a result of this event, all else the same. Consider only the immediate effects. Don't assume any subsequent decisions by the players. , L = Assets Place a 1 in the box if the entry will change, 0 otherwise. No commas or decimals, just 0 and 1. Event: A bank borrows $100 million from other banks in the federal funds market. The Fed Reserves (E) Securities (G) Loans (1) Liabilities and Net Worth Currency in Circulation (B) Reserves (D) C= Banks Assets Currency in Circulation (K) Loans (L) Deposits (M) Securities (N) G= Liabilities and Net Worth Deposits (F) Borrowings (H) Bank Capital (J) Public Liabilities and Net Worth ,M= Non-Bank Net Worth (0) ,D= ,H= , N=

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
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Question 20
The Fed
A =
Banks.
E=
Non-Bank Public
K=
B =
,F=
Assets
, L =
O=
Securities (A)
Loans to Banks (C)
The above figure shows the three balance sheets by the players in the money supply process.
These are aggregate balance sheets. For example, the deposits in the non-bank-public balance
sheet is the sum of all the deposits owned by individuals and businesses. An event occurs. You
need to figure out which one of the above entries will change as a result of this event, all else the
same. Consider only the immediate effects. Don't assume any subsequent decisions by the players.
Assets
Place a 1 in the box if the entry will change, 0 otherwise. No commas or decimals, just 0 and 1.
Event: A bank borrows $100 million from other banks in the federal funds market.
Reserves (E)
Securities (G)
Loans (1)
The Fed
|, C =
Liabilities and Net Worth
Currency in Circulation (B)
Reserves (D)
G=
Banks
Assets
Currency in Circulation (K) Loans (L)
Deposits (M)
Securities (N)
, M=
Liabilities and Net Worth
Deposits (F)
Borrowings (H)
Bank Capital (1)
Public
Liabilities and Net Worth
Non-Bank
Net Worth (0)
,D=
,H=
,N=
Transcribed Image Text:Question 20 The Fed A = Banks. E= Non-Bank Public K= B = ,F= Assets , L = O= Securities (A) Loans to Banks (C) The above figure shows the three balance sheets by the players in the money supply process. These are aggregate balance sheets. For example, the deposits in the non-bank-public balance sheet is the sum of all the deposits owned by individuals and businesses. An event occurs. You need to figure out which one of the above entries will change as a result of this event, all else the same. Consider only the immediate effects. Don't assume any subsequent decisions by the players. Assets Place a 1 in the box if the entry will change, 0 otherwise. No commas or decimals, just 0 and 1. Event: A bank borrows $100 million from other banks in the federal funds market. Reserves (E) Securities (G) Loans (1) The Fed |, C = Liabilities and Net Worth Currency in Circulation (B) Reserves (D) G= Banks Assets Currency in Circulation (K) Loans (L) Deposits (M) Securities (N) , M= Liabilities and Net Worth Deposits (F) Borrowings (H) Bank Capital (1) Public Liabilities and Net Worth Non-Bank Net Worth (0) ,D= ,H= ,N=
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