ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Suppose banks keep no excess reserves and that all banks are currently meeting their desired reserve requirement. The Bank of Canada then makes an open market
purchase of $13,000 from Bank 1.
Use the T-account below to show the result of this transaction for Bank 1, assuming Bank 1 keeps no excess reserves after the transaction. (Remember T-accounts
show the changes to a bank's balance sheet.)
Bank 1's T-account
Assets
Liabilities
Reserves $
Deposits $
Loans
$
Securities $
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Transcribed Image Text:Suppose banks keep no excess reserves and that all banks are currently meeting their desired reserve requirement. The Bank of Canada then makes an open market purchase of $13,000 from Bank 1. Use the T-account below to show the result of this transaction for Bank 1, assuming Bank 1 keeps no excess reserves after the transaction. (Remember T-accounts show the changes to a bank's balance sheet.) Bank 1's T-account Assets Liabilities Reserves $ Deposits $ Loans $ Securities $
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