Suppose the Federal Reserve Bank decides to make an open market sale. The Fed’s sell order is matched with a buy order placed not by a bank but instead an individual or a non-bank corporation. The Fed sells $150 in US T-bills to the non-bank public. The buyer of the T-bills writes a $150 check to the Fed against his or her account at PNC Bank. Identify the balance sheet changes for each player involved. Do not enter dollar signs, just the number, and if negative place a negative in front.
Suppose the Federal Reserve Bank decides to make an open market sale. The Fed’s sell order is matched with a buy order placed not by a bank but instead an individual or a non-bank corporation. The Fed sells $150 in US T-bills to the non-bank public. The buyer of the T-bills writes a $150 check to the Fed against his or her account at PNC Bank. Identify the balance sheet changes for each player involved. Do not enter dollar signs, just the number, and if negative place a negative in front.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Suppose the Federal Reserve Bank decides to make an open market sale. The Fed’s sell order is matched with a buy order placed not by a bank but instead an individual or a non-bank corporation. The Fed sells $150 in US T-bills to the non-bank public. The buyer of the T-bills writes a $150 check to the Fed against his or her account at PNC Bank. Identify the
Non-bank public
Securities:
Currency:
Deposits:
PNC
Securities:
Reserves:
Deposits:
Borrowings:
Fed
Securities:
Discount loans:
Currency:
Reserves:
Monetary Base:
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