3. Suppose the minimum reserve requirement for banks in this economy is 5%. Balance Sheet of...

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3. Suppose the minimum reserve requirement for banks in this economy is 5%. Balance Sheet of the First Bank Assets Liabilities $35 $0 $865 $200 Deposit Debt $700 $200 Reserves Central Bank Reserves Loans Government Securities Equity Equity $200 Total $ 1,100 $ 1,100 Total a) Write a new balance sheet for the First Bank after the Central Bank (i.e., The Federal Reserve of this economy) conducts Open Market Purchase worth $135. 3. Suppose the minimum reserve requirement for banks in this economy is 5%. Balance Sheet of the First Bank Assets Liabilities $35 $0 $865 $200 Deposit Debt $700 $200 Reserves Central Bank Reserves Loans Government Securities Equity Equity $200 Total $ 1,100 $ 1,100 Total a) Write a new balance sheet for the First Bank after the Central Bank (i.e., The Federal Reserve of this economy) conducts Open Market Purchase worth $135.

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3 a If Central bank conducts open market purchase tha... View the full answer