Discuss component of the monetary base

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Bank: Assets Bank: Liabilities: Bank:Securities: Bank: Reserves:

Federal: Assets Federal: Liabilities:

Federal: Securities: Federal: Reserves

Suppose the federal reserve makes a $500 million open market purchase from bank. explain whether or not each item on the balance sheet and on the federal reserve's balance sheet is affected. If the dollar value of an item does change please use the + to indicate an increase or - to indicate a decrease.

Explain how he open market purchase affects the monetary base and discuss each component of the monetary base.

Reference no: EM132505374

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