Find reserves and the monetary base

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Suppose that the required reserve ratio is 7.5%. If the Fed sells $530 million of bonds to the First National Bank. What happens to reserves and the monetary base? What will happen to the money supply? Show the changes in (a) The Federal Reserve's holding of securities, (b) reserves at the Federal Reserve, (c) reserves held by First National Bank, (d) securities held by First National Bank, (e) reserves in the entire banking system, (f) security holding in the entire banking system, (g) deposits in the entire banking system, and (h) loans made throughout the entire banking system.

Reference no: EM133081605

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