Question: If the Fed loans depository institutions 200 million in reserves
If the Fed loans depository institutions $200 million in reserves from the discount windows of the Federal Reserve banks, by how much will the legal reserves of the banking system change? What happens when these loans are repaid by the borrowing institutions?
Answer to relevant QuestionsWhat happens when a central bank like the Federal Reserve expands its assets? Is there any upper limit to a central bank’s assets? Why? What trend in branch banking has been prominent in the United States in recent years?What relationship appears to exist between bank size, efficiency, and operating costs per unit of service produced and delivered? How about among nonbank financial-service providers?What is corporate governance, and how might it be improved for the benefit of the owners and customers of financial firms?What are the advantages of having a national bank charter? A state bank charter?
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