Use the following balance sheets for the RBA, NAB and Westpac to illustrate effects of the following transactions. Use a plus (+) to denote inflows and a minus (-) to denote outflows.

1) The Federal Government deposits $200 million in pension payments into the accounts of NAB customers. What has happened to the amount of ESA funds ("cash") in the system?

2) Westpac sells $200 million worth of securities to NAB. What has happened to the amount of ESA funds ("cash") in the system?

3) The RBA sells $200 million worth of securities to Westpac. What has happened to the amount of ESA funds ("cash") in the system?

Transcribed Image Text:

West pac Liabilities ($ m) NAB Assets ($ m) Assets ($ m) Liabilities ($ m) ESA Deposits ESA Deposits Loans Loans Securities Securities RBA Assets ($ m) Liabilities ($ m) Securities ESA (NAB) ESA (Westpac) Gov. Account West pac Liabilities ($ m) NAB Assets ($ m) Assets ($ m) Liabilities ($ m) ESA Deposits ESA Deposits Loans Loans Securities Securities RBA Assets ($ m) Liabilities ($ m) Securities ESA (NAB) ESA (Westpac) Gov. Account

Answer rating: 100% (QA)

21 Answer Federal govt deposits 200 million in pension payments to the account of NAB customers Now ... View the full answer