4. Consider the T-table of the Bank of Boston. Suppose the Federal Reserve Bank buys an additional $2 million in governm

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4 Consider The T Table Of The Bank Of Boston Suppose The Federal Reserve Bank Buys An Additional 2 Million In Governm 1 (40.51 KiB) Viewed 30 times

4. Consider the T-table of the Bank of Boston. Suppose the Federal Reserve Bank buys an additional $2 million in government bonds from the Bank of Boston. Assume (1) the required reserve ratio is 20 percent, and (2) the Bank of Boston issues all excess reserves in loans (i.e., there are no excess reserves). The new money supply equals $ million Submit Balance sheet of the Bank of Boston Assets Liabilities Government bonds -$5,000,000 Checkable deposits +$5,000,000 Currency (= bank reserves) +$5,000,000 Loans $0