>> Finance Basics
If the Fed bought $3.5 billion in government securities and the public withdrew $2.0 billion from their transactions deposits in the form of cash, by how much would the monetary base change? By how much would financial institutions' reserves change? By how much would financial institutions' required reserves change if all proceeds from bond sales and all withdrawals from transactions accounts were deposited in or taken from accounts subject to a 10 percent reserve requirement? By how much would depository institutions' net excess reserves change?