The Federal Reserve System is the central bank of the United States. It has 12 regional banks and 24 branches throughout the country. Search the web and find the Fed regional Bank and Branch which serves the state of Alabama. Among 12 regional Fed Banks, which bank is the largest in assets and the second largest in assets

The Federal Reserve System is the central bank of the United States. It has 12 regional banks and 24 branches throughout the country. Search the web and find the Fed regional Bank and Branch which serves the state of Alabama. Among 12 regional Fed Banks, which bank is the largest in assets and the second largest in assets

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter28: Monetary Policy And Bank Regulation

Section: Chapter Questions

Problem 39P: Suppose the Fed conducts an open market sale by selling $10 million in Treasury bonds to Acme Bank....

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A bank has deposits of 400. It holds reserves of 50. It has purchased government bonds worth 70. It has made loans of 500. Set up a T-account balance sheet for the bank, with assets and liabilities, and calculate the banks net worth.
How do you calculate a banks net worth?
Suppose the Fed conducts an open market sale by selling $10 million in Treasury bonds to Acme Bank. Sketch out the balance sheet changes that will occur as Acme restores its required reserves (10% of deposits) by reducing its loans. The initial balance sheet for Acme Bank contains the following information: Assets - reserves 30, bonds 50, and loans 250; Liabilities - deposits 300 and equity 30.
Explain why think the Federal Reserve Bank tracks M1 and M2.
Humongous Bank is the only bank in the economy. The people in this economy have 20 million in money, and they deposit all their money in Humongous Bank. Humongous Bank decides on a policy of holding 100 reserves. Draw a T-account for the bank. Humongous Bank is required to hold 5 of its existing 20 million as reserves, and to loan out the rest. Draw a T-account for the bank after it has made its first round of loans. Assume that Humongous bank is part of a multibank system. How much will money supply increase with that original 19 million loan?
List the three traditional tools that a central bank has for controlling the money supply.
How can a bank end up with negative net worth?