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 How is it the case that the Fed's purchase of an asset from a non-bank institution turns out to increase the level of reserves held by banks at the Fed itself? 

Why was the increase in total reserves accompanied by a rise in excess reserves? Was such rise a signal of the banks' reluctance to lend to non-financial institutions?

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1 Feds Purchase of Assets and Increase in Reserves When the Federal Reserve purchases assets from no... View the full answer