Suppose the Fed conducts an open market sale by selling $10 million in Treasury bonds to Great Western Bank. Sketch out the balance sheet changes that will occur as Great Western restores its required reserves (10% of deposits) by reducing its loans. The initial balance sheet for Great Western Bank contains the following information (all in $ millions): Assets – reserves 30, bonds 50, and loans 250; Liabilities – deposits 300 and equity 30.

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