The Treasury usually requires most businesses to regularly deposit taxes withheld from employees into accounts at designated commercial banks. On a regularbasis, the funds in these accounts are transferred to the Treasury's account at the Fed. Discuss what is happening to the balance sheet of the banking system asthe businesses are making deposits and these tax accounts are increasing. What happens to the banking system's balance sheet when the funds are transferred tothe Fed?

Answer rating: 100% (QA)

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