The Federal Reserve buys $2000 in bonds from Jill who deposits the funds in Jack's Bank....
The Federal Reserve buys $2000 in bonds from Jill who deposits the funds in Jack's Bank. Jack's Bank then lends Jacquita $500. After all of these transaction are complete, the Reserves in Jack's Bank have risen by $_____ .
Homework Answers
Answer) In this case,initially Federal reserve buys bonds from Jill and Jill gets $2000 in return,who deposits funds in Jack 's bank,so Jack 's bank has $2000 addition of funds in its account,Jack 's bank then lends $500 to Jacquita that is Jack 's bank 's funds decreases by $500 now,so in total,Jack 's bank 's funds have increased by $2000-$500=$1500 that is after all of these transactions,the reserves in Jack 's bank have risen by $1500.
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The Federal Reserve buys $2000 in bonds from Jill who deposits
the funds in Jack's Bank....
The Federal Reserve buys $2000 in bonds from Jill who deposits the funds in Jack's Bank....
The Federal Reserve buys $2000 in bonds from Jill who deposits the funds in Jack's Bank. Jack's Bank then lends Jacquita $500. After all of these transaction are complete, the Reserves in Jack's Bank have risen by $_____ .
The Federal Reserve buys $2000 in bonds from Jill who deposits the funds in Jack's Bank....
The Federal Reserve buys $2000 in bonds from Jill who deposits the funds in Jack's Bank. Jack's Bank then lends Jacquita $500. After all of these transaction are complete, the money supply has risen by $_____ .
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a. Show the balance sheet of the Federal Reserve
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b. Show the balance sheet of the Federal Reserve
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